Plaintiff’s Last Dance: The Order to Show Cause & the 2nd Hearing

The second post in this series ended with the first hearing. Afterwards, the judge issued an order to show cause why the case should not be dismissed and why sanctions should not issue.  The order was eight pages long and detailed each time in the record where Partner 1 signed a document that implied Plaintiff was alive.  I imagine if I was Partner 1 it might have been like reading a detailed plan for your own execution.

The order ended by summarizing the court’s concerns.

In short, counsel signing the complaint in this case filed a complaint for a deceased person without apparent authorization and in violation of the legal requirement that an authorized representative be named as the proper party. At no time before December 12, [year], was the court aware that this lawsuit had been filed on behalf of a deceased plaintiff. The complaint on file made representations that [Plaintiff] was alive by claiming, inter alia, that he was suffering and would continue to suffer from injuries sustained at [location on date], incur additional medical expenses and other costs including attorney’s fees, and that his life and lifestyle were deteriorating. The plaintiff’s answers to interrogatories and responses to request for production of documents also suggest that [Plaintiff] was alive because the responses were written in the first person as if [Plaintiff] was answering the requests himself. Additionally, it appears counsel for plaintiff was attempting to settle on behalf of a deceased client rather than respond to discovery requests and inform opposing counsel that the client was deceased. With a deceased client and no identified authorized representative substituted as a proper party to this lawsuit the court has serious concerns about how counsel thought they could lawfully execute a release, resolve any outstanding liens, and sign a stipulation to dismiss. The court also has serious concerns about who counsel believed settlement proceeds could be lawfully and ethically distributed.

The order then specifically directed Partners 1 and 2 to appear, in person.  Partner 2’s name was on the complaint, even if he did not sign it.  They were also ordered to file separate briefs answering questions about their individual roles in what happened.  The stage was set.

My response to the order to show cause.

My client was not directed to show cause, but responded to the order anyway.  Plaintiff’s counsel lied to them and they understandably wanted the complaint dismissed.[1]

Dismissal was merited because the real party in interest had not filed the complaint.

My first argument did not depend upon what Plaintiff or his counsel had posthumously done.  It instead focused on the fact that the real party in interest had not filed the suit.

Plaintiff’s death did not terminate his potential claim.  “[N]o cause of action is lost by reason of the death of any person, but may be maintained by or against the person’s executor or administrator.”[2]  “[W]hen a person who has a cause of action dies before judgment, the damages recoverable by the decedent’s executor or administrator include all losses or damages which the decedent incurred or sustained before the decedent’s death….”[3]  Construing these statutes, the Ninth Circuit concluded they extend “the right to bring a survival action only to the official representatives of an individual’s estate; no mention is made of a similar right extending to family members or heirs to bring a survival action independent or in lieu of the estate’s claim.”[4]  “The Nevada legislature’s decision to mention only estate representatives in § 41.100(3) leads naturally to the conclusion that the right to bring a survival action in Nevada is limited to the duly appointed representatives of a deceased’s estate.”[5]

Although the claim may not have died with Plaintiff, the lawsuit was filed in his individual capacity.  There was no indication that an estate was created in the state probate court to pursue Plaintiff’s claim.  Nor was there an indication of efforts to even create the estate.  As the named plaintiff lacked standing to bring the claim, I argued dismissal was appropriate for the same reasons as the Ninth Circuit found in Moreland.

Dismissal was merited because it appeared someone lied.

The second argument had no choice but to address the elephant in the room: Partner 1 concealed Plaintiff’s death.  The order to show cause expressed numerous concerns about the timing of multiple events and the reason why Plaintiff’s May 19 death was not disclosed until December 12.  Determining whether any misrepresentations occurred between those two dates depended upon when Partner 1 learned of the death.  I didn’t know the answer to that question yet but, assuming it would come out, I provided the analysis that I hoped would support dismissal.

Potentially relevant rules.

NRPC 3.3(a)(1) states a “lawyer shall not knowingly: (1) Make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer.  NRPC 3.4(b) states a “lawyer shall not (b) Falsify evidence, counsel or assist a witness to testify falsely.”  NRPC 4.1 also seemed to apply.  “Truthfulness in Statements to Others.  In the course of representing a client a lawyer shall not knowingly: (a) Make a false statement of material fact or law to a third person.”  Finally, NRPC 8.4 states “[i]t is professional misconduct for a lawyer to:  (a) Violate or attempt to violate the Rules of Professional Conduct… (c) Engage in conduct involving dishonesty, fraud, deceit or misrepresentation; [or] (d) Engage in conduct that is prejudicial to the administration of justice.”

Rule 11(a) requires “[e]very pleading, written motion, and other paper must be signed by at least one attorney of record in the attorney’s name….”  Rule 11(b) is also relevant.

By presenting to the court a pleading, written motion, or other paper—whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances.

Rule 11(c) authorizes sanctions if Rule 11(b) is violated.  If so, “the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation.  Absent exceptional circumstances, a law firm must be held jointly responsible for a violation committed by its partner, associate, or employee.”[6]  The court may initiate the Rule 11 process on its own motion.  “On its own, the court may order an attorney, law firm, or party to show cause why conduct specifically described in the order has not violated Rule 11(b).”[7] 

However, Rule 11 “does not apply to disclosures and discovery requests, responses, objections, and motions under Rules 26 through 37.”[8]  Rule 37(c)(1) authorizes sanctions “[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e)….”  If sanctionable conduct occurred, “the court, on motion and after giving an opportunity to be heard: (A) may order payment of the reasonable expenses, including attorney’s fees, caused by the failure; (B) may inform the jury of the party’s failure; and (C) may impose other appropriate sanctions….”[9]

Finally, a court has inherent authority to manage its docket and the conduct of those appearing before the court.  “A district court possesses inherent power over the administration of its business.  It has inherent authority to regulate the conduct of attorneys who appear before it, to promulgate and enforce rules for the management of litigation, to punish contempt, and to remand cases involving pendent claims.”[10]

A client’s death is a material fact that must be disclosed.

A prior post discussed how a client’s death is a material fact that must be disclosed.  I used that analysis as a starting point, but then took it much, much further.  Why?  Human beings are inherently lazy.  More often than not, we will take the path of least resistance.  If you want a human to do something, make it easy.  My client and I wanted the case dismissed and a head on a pike.  So I spent the time drafting a brief that a judge could cut and paste into an order with minimal effort.

In 1995 the American Bar Association issued a formal opinion about “whether a lawyer in a personal injury action … has a duty to disclose … the fact that the plaintiff has just died.”[11]  The question arose because the plaintiff died during the course of settlement negotiations.  The opinion concluded “the lawyer has a duty to inform opposing counsel and the court in the lawyer’s first communication with either after the lawyer has learned of that fact.”[12]  A 2017 journal article indicated this conclusion still survived.  “Several exceptions to the general rule that lawyers have no affirmative duty to inform opposing parties of relevant facts have been revealed, including when (1) the client has passed away….”[13] 

Various courts encountering similar facts have adopted the same conclusion.  Harris v. Jackson arose from an auto accident where Harris negligently struck Jackson’s vehicle, injuring her.[14]  The accident occurred on June 3, 1999, suit was filed on March 23, 2000, and the defendant driver, Harris, died on May 25, 2001 while the litigation was still pending.  Defense counsel did not reveal that fact until June 10, 2002 when he filed a motion to dismiss, which was granted.

On appeal, the Supreme Court of Kentucky noted defense counsel’s representation of Harris had ended upon his death, as it and other jurisdictions had previously held.[15]  The Court still chose to address whether counsel was required to disclose the death.  “While we do acknowledge that lawyers do not have a duty, except as otherwise established, to practice the case for the opposing counsel — this is still an adversarial profession — the esteem of the legal profession requires some disclosures to meet the rules of professional ethics.”[16]  “[C]andor and honesty necessarily require disclosure of such a significant fact as the death of one’s client.  …  Standards of ethics require greater honesty, greater candor, and greater disclosure, even though it might not be in the interest of the client or his estate.”[17]

Kentucky had adopted the model rule upon which the 1995 ABA opinion was based.  Applying it, after the lawyer learns of the client’s death “any subsequent communication to opposing counsel with respect to the matter would be the equivalent of knowing, affirmative misrepresentation should the lawyer fail to disclose the fact that she no longer represent the previously identified client.”[18]  “[F]ailure to disclose the death of a client is tantamount to making a false statement of material fact within the meaning of Model Rule 4.1(a)….”[19]  The order granting dismissal was reversed, but Harris did not sanction defense counsel because he sought and obtained an ethical opinion from the bar association that condoned his course of action, although the Court concluded the ethical opinion was wrong.

Virzi v. Grand Trunk Warehouse & Cold Storage Co. raised “an important issue relating to the ethical obligation of an attorney to inform opposing counsel and the Court, prior to concluding a settlement, of the death of his client.  …  [T]he Court holds the attorney has an absolute ethical obligation to do so….”[20]  The case was scheduled for a court ordered mediation.  The plaintiff died nine days before the mediation occurred, but somehow plaintiff’s counsel was unaware of this fact until after the mediation occurred.[21]  Although an estate was subsequently created, in the case that had been mediated “no suggestion of death was made in this Court, and the representative was not substituted as plaintiff.”[22]  The attorney then appeared at a pretrial conference and advised that the parties had agreed to settle, but “[a]t no time, from the time plaintiff’s attorney learned of the plaintiff’s death until the agreement to settle the case for $35,000 at the pretrial conference, did plaintiff’s attorney notify defendants’ attorney or the Court of the death of the plaintiff.”[23]  The death was revealed to defendants’ counsel only after the hearing, as the lawyers were walking to the elevator.[24]  Apparently, the “defendants had learned of plaintiff’s death shortly before the settlement was agreed upon, but were unable to convey this information to their attorney before the settlement order was entered.  At no time did defendants’ attorney ask plaintiff’s attorney if plaintiff was still alive and available for trial.”[25]

The defendant moved to set the settlement aside, arguing both the failure to disclose and also that no settlement was possible because the real party in interest had not been added to the lawsuit.  Plaintiff opposed, arguing “that he had no duty to volunteer that information and that the settlement entered into is a fair and reasonable settlement.”[26]  The court noted “the fact of plaintiff’s death nevertheless would have had a significant bearing on defendants’ willingness to settle.”[27]

The settlement was set aside.  Virzi concluded

candor and honesty necessarily require disclosure of such a significant fact as the death of one’s client. Opposing counsel does not have to deal with his adversary as he would deal in the marketplace. Standards of ethics require greater honesty, greater candor, and greater disclosure, even though it might not be in the interest of the client or his estate.[28]

In re Lyons was a professional discipline matter that alleged the attorney’s “failure to disclose his client’s death during settlement negotiations and false and misleading statements made to opposing counsel and to the [disciplinary panel] about the client’s death constituted unprofessional conduct warranting public discipline.”[29]  The attorney’s emails documented that he was aware his client died on October 9, 2007.[30]  He did not disclose that fact, and settled the now deceased client’s claim on October 27, 2007.[31]  A settlement agreement was drafted and “[o]n January 14, 2008, the agreement, signed by the client’s wife as personal representative of the estate rather than under a power of attorney, was returned to” the defendant.[32]  The defendant immediately objected, but the attorney then began lying about what he knew and when.  An ethics complaint was filed and the attorney was suspended indefinitely from practice for failing to disclose the death.

In re Forrest was also a disciplinary matter where a husband and wife filed a personal injury lawsuit and the husband died at some point after the complaint was filed.[33]  The surviving wife notified the lawyer of the husband’s death.[34]  Despite that, the lawyer “served unsigned answers to interrogatories, entitled ‘Plaintiff Robert A. Fennimore’s Answers to Defendant’s . . . Interrogatories,’ on his adversary… .  Neither the answers nor the cover letter indicated that Mr. Fennimore had died.”[35]  The lawyer then appeared for an arbitration hearing and the lawyer “advised Mrs. Fennimore that when she testified she should not voluntarily reveal her husband’s death.”[36]  The death was not disclosed for at least another 16 months, and only after the deceased client failed to appear for a court ordered medical examination.[37] 

At the subsequent disciplinary hearing, the lawyer did not deny the factual record.  He instead argued discipline was not warranted, in part, because “he acted out of a desire to enhance the recovery for his clients and always had his clients’ best interests in mind; that he made no misrepresentations throughout the Fennimore matter but merely withheld certain information, a negotiation technique he describes as ‘bluffing’ and ‘puffing’….”[38]  The Supreme Court of New Jersey disagreed.  “[W]e hold that respondent’s withholding of the material fact of Mr. Fennimore’s death was misleading and violative of RPC 3.3(a)(5).”[39]  This was because the lawyer had withheld the fact from the arbitrator and the court upon the motion to compel a medical examination.[40]  The violations continued.  The lawyer

obstructed opposing counsel’s access to potentially valuable evidence, in violation of RPC 3.4(a), by failing to inform opposing counsel that Mr. Fennimore was deceased. Respondent deliberately misled his adversary by serving answers to interrogatories propounded on Mr. Fennimore without disclosing that his client was deceased. Respondent exacerbated that deception by attempting to negotiate a settlement of the claim although his adversary remained uninformed of Mr. Fennimore’s death.[41]

The lawyer was suspended for six months because his “misconduct extended far beyond adversarial tactics that might constitute acceptable ‘puffing’ or ‘bluffing.’ Respondent’s nondisclosure of Mr. Fennimore’s death deceived both his adversary and the arbitrator about a fact that was crucial to the fair and proper resolution of the litigation.”[42]

Yoh v. Hoffman was an automobile accident where the injured plaintiff sued the defendant driver.  The plaintiff was unaware the driver had died a almost a year before.  An insurance company assigned counsel to defend the driver and filed an answer that he signed as “Attorneys for Defendant.”[43]  The death was not disclosed for almost 10 months.  The plaintiff then filed an amended complaint against the estate and estate’s motion for summary judgment arguing the statute of limitations had expired was rejected.

That ruling was appealed and affirmed.  “There is at least one other reason that the district court’s decision to reject defendant’s motion for summary judgment should be upheld, and we will speak plainly: Knowingly filing a pleading on behalf of a dead person as though he or she is still alive is fraud.”[44]  The defense had deliberately deceived the plaintiff.  “It was completely inappropriate to file an answer calculated to mislead by hiding the true state of affairs behind vague boilerplate defenses.”[45]  The attorney and insurer were “responsible for representing to the court and to plaintiff that [the driver] never left this valley of tears before the statute of limitations ran. Their fraud tolled the statute of limitations and made summary judgment for the estate unavailable.”[46]

In re Edison was a disciplinary matter where the defendant driver had died years before suit was filed or the lawsuit was served.[47]  Contained within the file provided to the driver’s assigned defense attorney was a letter from her insurance agent indicating the driver had died.[48]  Despite that, the defense attorney filed an answer on the driver’s behalf.[49]  The attorney subsequently learned of the death from the driver’s husband and then filed an amended answer, still on the driver’s behalf, that added insufficiency of process as an affirmative defense.[50]  However, the driver’s death was not disclosed until the plaintiff supplied proof of service of the original complaint.[51]

The court concluded discipline was appropriate.  Even if there was no affirmative duty to disclose the death, “Harrie [defense counsel] served an answer and amended answer on behalf of Ellen Welch, and at least by the time of the amended answer, Harrie had actual knowledge that Welch had died.”[52]  It then quoted Yoh: “Knowingly filing a pleading on behalf of a dead person as though he or she is still alive is fraud.”[53]

In Toledo Bar Ass’n v. Fell a lawyer pursuing a worker’s compensation claim, aware of “the long established practice of the Industrial Commission to deny any claim for permanent-total disability benefits upon notice of the death of the claimant, deliberately withheld information concerning his client’s death prior to the hearing on the motion concerning the claim.”[54]  As a result, the attorney was indefinitely suspended from practice.  Discipline was also appropriate in In re Rosen where the attorney, “by referring to his client in the present tense as if he were still alive, and in misinforming Safeco about the actual timing of his client’s death and the respondent’s own awareness of it, was knowingly deceitful.”[55]

In Mok v. 21 Mott St. Rest. Corp. the “attorney did not disclose to the Court or to opposing counsel that his client had died until eight months after the client’s death and four months after he says he learned of it.”[56]   The court chose to sanction the attorney.  It “can comfortably and clearly find that his actions were taken with ‘intent’ and were subjectively in bad faith. He knew he was purporting to settle a case on behalf of a dead client without disclosing that his client was dead.”  This conduct violated New York’s rules of professional conduct 3.3(a)(1), Rule 3.3(e), and Rule 3.4(a)(3).  The court sanctioned the attorney, per 28 U.S.C. § 1927, by requiring him to pay defendants’ legal fees “from the date of the misconduct, i.e. when Sherr had a duty to disclose but did not which, viewing the facts in light most favorable to Sherr, was January 25, 2017 (the date of Minsley’s letter reporting the restart of settlement discussions); all fees from that date are causally (and not merely temporally) related to the sanctionable conduct.”

The 2nd hearing.

The order to show cause set the hearing for February 1.  It expressly stated all briefing was due “no later than January 26.”  Partners 1 and 2 didn’t meet that deadline, filing their responses January 31, at 6:12 p.m., for a 9:00 a.m. hearing.[57]

Despite that, they both appeared at the hearing the next day.[58]  After entering appearances the judge told Plaintiff’s counsel something I’d never heard before.  “Gentlemen, I’m pleasantly surprised you are here.  To be quite honest, I wasn’t sure you would show up.  Last night I was researching my authority to issue a bench warrant for your arrest.”  Those words were bone chilling.

The judge then dressed counsel down for a laundry list of items, including filing their responses at the 11th hour.  The responses did not even fully address all the items in the order. The hearing was continued for further briefing as to each of the questions contained in the order to show cause. It seemed the judge was making a record to support execution.

[1] They and I also wanted a head on a pike.  The message sent by putting someone’s head on a pike is unmistakable and is never lost in translation.

[2] NRS 41.100(1).

[3] NRS 41.100(3).

[4] Moreland v. Las Vegas Metro. Police Dep’t, 159 F.3d 365, 370 (9th Cir. 1998).

[5] Id.

[6] Rule 11(c)(1).

[7] Rule 11(c)(3).

[8] Rule 11(d).

[9] Rule 37(c)(1).

[10] Spurlock v. FBI, 69 F.3d 1010, 1016 (9th Cir. 1995).

[11] ABA Comm. on Ethics and Prof’l Responsibility, Formal Opinion 95-397 (1995).

[12] Id.

[13] Gregory T. Presmanes, et. al., Ethical Negotiations: How Far is Too Far? 52 Tort Trial & Ins.  Prac. L. J. 903, 911 (2017).

[14] 192 S.W.3d 297 (Ky. 2006).

[15] Id. at 301 (quoting Kentucky Bar Ass’n v. Geisler, 938 S.W.2d 578 (Ky. 1997)(“When … death occurs, however, the lawyer ceases to represent that identified client.”); see also Brantley v. Fallston General Hosp. Inc., 636 A.2d 444 (Md. App. 1994)(counsel’s authority to file an appeal terminates upon death of client); Earls v. Farmers Production Credit Ass’n., 763 S.W.2d 694, 695 (Mo. App. 1988)( the capacity to be party appellant or respondent reposes only in persons in being); Fariss v. Lynchburg Foundry, 769 F.2d 958 (4th Cir. 1985)(attorney’s agency to act ceases with the death of client and he has no power to continue or terminate an action on his initiative).

[16] Id. at 305.

[17] Id. (quoting Geisler, 938 S.W.2d at 580).

[18] Geisler, 938 S.W.2d at 579.

[19] Id.

[20] 571 F. Supp. 507, 508 (E.D. Mich. 1983).

[21] Id.

[22] Id.

[23] Id.

[24] Id.

[25] Id.

[26] Id. at 509.

[27] Id. at 511.

[28] Id.

[29] In re Lyons, 780 N.W.2d 629, 631 (Minn. 2010).

[30] Id.

[31] Id.

[32] Id. at 632.

[33] 730 A.2d 340, 341-42 (N.J. 1999).

[34] Id. at 342.

[35] Id.

[36] Id.

[37] Id.

[38] Id.

[39] Id. at 343.

[40] Id. at 343-44.

[41] Id. at 344.

[42] Id. at 345.

[43] 27 P.3d 927, 929 (Kan. App. 2001).

[44] Id. at 931.

[45] Id.

[46] Id.

[47] 724 N.W.2d 579, 580 (N.D. 2006).

[48] Id.

[49] Id.

[50] Id. at 580-581.

[51] Id.

[52] Id. at 583.

[53] Id. (quoting Yoh, 27 P.3d at 931).

[54] 364 N.E.2d 872, 873 (Ohio 1977).

[55] 198 P.3d 116, 121 (Colo. 2008).

[56] No. 14-cv-8081, 2017 U.S. Dist. LEXIS 145794 (S.D.N.Y. Sep. 8, 2017).

[57] When in a hole and you really need to get out, the best solution is to keep digging.

[58] Associate was nowhere to be found.