New Ethics Opinion

 The Mississippi Board of Professional Responsibilty just released a new ethics opinion located here. 

A complete copy is below.  I have not been posting in a while but I am going to try to restart posting more.    Life and law has been busy.   

CAVEAT: This Opinion is limited strictly to the facts as presented for analysis under Mississippi’s Rules of Professional Conduct. The facts and questions outlined below and the opinion rendered is limited to ethical issues only.

 

The Ethics Committee of The Mississippi Bar has been asked to render an opinion on the following question and hypothetical:

When settlement of a case requires a release to be signed by a party (“Releasor”), can the attorney representing the Releasee require the signature of the Releasor's attorney to “approve” or “agree to” the release? 

This request referenced releases that the attorney was presumably being asked to sign that included obligations required of the Releasors, such as holding the Releasee harmless, requiring indemnification, reimbursement for claims, etc.  The attorney clearly anticipates additional such requests in the future and seeks to determine whether such conduct is a violation of the Mississippi Rules of Professional Conduct.   

 

Applicable Rules

The following Rules of Professional Conduct are applicable to this opinion. The relevant portions of those Rules provide:

 

Rule 1.2(a)

A lawyer shall abide by a client’s decisions concerning the objections of representation, subject to paragraphs (c), (d), (e) and shall consult with the client as to the means by which they are to be pursued.  A lawyer shall abide by a client’s decision whether to accept an offer of settlement of a matter…

Rule 1.7(b)

 A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interests…

Rule 1.8(e)

 A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, or administrative proceedings, …

Rule 2.1

In representing a client, a lawyer shall exercise independent professional judgment and render candid advice.  In rendering advice, a lawyer may refer not only to law but to other considerations such as moral, economic, social and political factors that may be relevant to the client’s situation.

Rule 8.4(a)

It is professional misconduct for a lawyer to violate or attempt to violate the rules of professional conduct, knowingly assist or induce another to do so, or do so through the acts of another.

 

Analysis

The common scenario in Mississippi is:

Plaintiff’s lawyer represents Plaintiff against Defendant in a personal injury lawsuit.  Plaintiff has received third party benefits to pay for their medical care.  The third-party benefit provider is making a subrogation claim against Plaintiff for reimbursement of amounts paid from a settlement or judgment. 

In order to settle Plaintiff’s case, Defendant sends a release that requires Plaintiff’s lawyer to sign.  The release contains a provision that Plaintiff and Plaintiff’s lawyer agree to indemnify Defendant, and his/her insurers, agents, and lawyers, for any failure to reimburse, or set aside sufficient funds to reimburse, the third-party payer for medical expenses already paid and to hold Defendant harmless for any future liability.    

In Crowley v. Germany, the Mississippi Supreme Court ruled that the circuit court abused its discretion by forcing lawyers representing the plaintiffs to sign a release of liability after a settlement of a case that stated the attorneys “agreed to” or “approved” the settlement.  268 So.3d 1277, 1278 (Miss. 2018).  The Court ruled that if the attorneys representing the plaintiffs signed the release then it could be interpreted as making them a party to the contract, which could subject them to personal liability and/or indemnity obligations.  Id. at 1279.  The Court went on to state that a judgement cannot be enforced “against persons who are not parties to an action.”  Id. at 1280 citing Commercial Bank of Magee v. Evans, 145 Miss. 643, 112 So. 482, 483 (1927). See also A1 Fire Sprinkler Contractors, LLC v. B.W. Sullivan Bldg. Contractor, Inc., 217 So.3d 731 (Miss. Ct. App. 2017).

Given this legal background, the Committee examines the ethical implications of the Requestor’s question.  Requiring a lawyer to sign a release for “approval” or “agreement” of the terms can put that lawyer in direct conflict with the desires or wishes of their client.  Rule 1.2(a) requires a lawyer to “abide by a client’s decisions…”  If the client wants to settle their case, but their lawyer does not want to sign the release to “approve” or “agree to” the terms because of fears of being bound by any of the terms of the release then the attorney cannot abide by Rule 1.2(a). 

Generally, in Mississippi the “approval” or “agreement” sought by the Releasee and their counsel from the Releasor's lawyer is an agreement for indemnification and hold harmless agreements for subrogation interests.      

“Agreeing to” or “approving” a release by a lawyer would also make it difficult for said lawyer to abide by Rule 2.1, which requires lawyers to “exercise independent professional judgment and render candid advice.”  If lawyers in Mississippi have to be concerned with whether they could face the threat of litigation for “approving” or “agreeing to” a release then it is likely the advice they give their clients could be affected, which could be to the detriment of the client.  A lawyer prosecuting a case should not be asked to indemnify the other party if a subrogation claim is brought – the lawyer is not a party, and the responsibility should fall on the parties only.  Any settlement agreement/release that makes settlement conditioned on the lawyer signing the release is asking said lawyer to violate Rules 1.2(a) and 2.1 of the Mississippi Rules of Professional Conduct.    Defense counsel’s insistence on such a release would be a violation of Rule 8.4(a).

Lawyers signing releases would also create a clear conflict of interest between the attorney and their client pursuant to Rules 1.7(b) as the lawyer’s own interests could be affected.  Lawyers should not be in the business of having to decide whether a release is going to negatively affect his relationship with his client in the future. 

If a release were entered into by a client (Releasor) and his lawyer that required the lawyer and client to indemnify the Releasee, and a future claim is brought against the Releasee then the Releasor and his lawyer could be contractually obligated to indemnify the Releasee.  Since the client (Releasor) actually received the benefit of the settlement then the lawyer and client would likely have a conflict about who should pay or indemnify – the client or the lawyer.  This dispute could easily rise to the level of litigation.

A conflict under Rule 1.7(b) between the lawyer and his client could be waived with the client’s informed consent in writing.  However, Rule 1.8(e) would also prevent a lawyer from entering into a release with his client because his agreement to indemnify the Releasee for unknown amounts would qualify as “financial assistance” to the client that is contemplated under the rule.  Even though the Releasee would be who would be seeking the indemnification, the Releasor, the lawyer’s client, is the one that would receive the benefit. 

There are 23 state and local bar associations in the United States that have issued ethics opinions stating that it is a violation of their ethical rules for a lawyer to sign a release that calls for the lawyer to agree or approve an indemnification agreement.  These include Tennessee, Georgia, South Carolina, Virginia, and Florida. 

 

Conclusion

 

After a thorough analysis by the Ethics Committee of the Mississippi Bar, we find that it is a violation of the Mississippi Rules of Professional Conduct for an attorney to sign a release that in any way “approved” or “agreed to” terms that would obligate them unless they are a party to the matter. 

We further find that it is a violation of the Mississippi Rules of Professional Conduct for a lawyer to ask another lawyer to sign a release that would require them to “approve” or “agree to” any of the terms of the settlement.

Life Insurance and Divorce

 The following statute is worth knowing regarding divorce in Mississippi.  

Section 91-29-23 - Pre-decree designation of ex-spouse as beneficiary of life insurance

(a) If a decree of divorce or annulment is rendered after an insured has designated the insured's spouse as a beneficiary under a life insurance policy in force at the time of rendition, a provision in the policy in favor of the insured's former spouse is not effective unless:

(1) The decree designates the insured's former spouse as the beneficiary;

(2) The insured redesignates the former spouse as the beneficiary after rendition of the decree; or

(3) The former spouse is designated to receive the proceeds in trust for, on behalf of, or for the benefit of a child or a dependent of either former spouse.

(b) If a designation is not effective under subsection (a), the proceeds of the policy are payable to the named alternative beneficiary or, if there is not a named alternative beneficiary, to the estate of the insured.

(c) An insurer who pays the proceeds of a life insurance policy issued by the insurer to the beneficiary under a designation that is not effective under subsection (a) is liable for payment of the proceeds to the person or estate provided by subsection (b) only if:

(1) Before payment of the proceeds to the designated beneficiary, the insurer receives written notice at the home office of the insurer from an interested person that the designation is not effective under subsection (a); and

(2) The insurer has not interpleaded the proceeds into the registry of a court of competent jurisdiction in accordance with the Mississippi Rules of Civil Procedure.

Discovery of Medical Bills After the Discovery Deadline

  Rule 26(f)(2) of the Mississippi Rules of Civil Procedure specifically addresses the supplementation of expert opinions.  What happens when a Plaintiff gets treatment after the discovery deadline though?

 Obviously, billing and records associated with a plaintiff's ongoing medical treatment fit into this category of required supplementation. Treatment for medical conditions often does not fit neatly into prescribed legal deadlines and supplementation of this material on a "rolling" basis as the treatment is rendered is considered timely. The situation changes, however, when billings were not timely submitted at or near the time of treatment, but rather collected and submitted long after discovery is closed.

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Tenants by the Entireties and Planning

 Tenants by the Entireties is a special deed form for married couples only.   It creates a separate entity that owns the real property and it is protected from actions by individual creditors of the husband or the wife.  Joint creditors of the husband and wife can still come after the property, but hey, just don’t co-sign anything with your spouse.  

With a tenants by the entireties deed the property is protected in bankruptcy for an unlimited amount of equity.   You are no longer limited to just the $75k homestead exemption protection. This is the deed form the legislature created for the protection of the marital home.  There is a two year look back period in bankruptcy so you need to plan ahead and do it now.  

 

Tax Sale and Actual Occupation of the Property

Mississippi Code 15-1-15 may be useful if a client has a tax sale property.   The statute provides, "Actual occupation for three years, after two years from the day of sale of land held under a conveyance by a tax collector in pursuance of a sale for taxes, shall bar any suit to recover such land or assail such title because of any defect in the sale of the land for taxes, or in any precedent step to the sale, saving to minors and persons of unsound mind the right to bring suit within such time, after the removal of their disabilities, and upon the same terms as is provided for the redemption of land by such persons."

Vehicle Repossession and Bankruptcy

 In Mississippi, there is a 10-day absolute right of redemption for a repossessed vehicle. If a bankruptcy is filed after the repossession, if the vehicle has not been sold and the title transferred to another party, once the bankruptcy is filed the lender must return the vehicle under the bankruptcy code.  The lender would also have to follow the statutory provisions for the disposition of the vehicle (i.e.-notice and right to redeem and notice of the date of the sale at auction or otherwise).   If the lender refuses to return the vehicle,  an adversary proceeding can be filed in Bankruptcy Court and you can recover damages, including attorney's fees and costs.   

COVID-19 and Employers

 The federal EEO laws do not prevent an employer from requiring all employees physically entering the workplace to be vaccinated for COVID-19, subject to the reasonable accommodation provisions of Title VII and the ADA and other EEO considerations discussed below.  These principles apply if an employee gets the vaccine in the community or from the employer.   

In some circumstances, Title VII and the ADA require an employer to provide reasonable accommodations for employees who, because of a disability or a sincerely held religious belief, practice, or observance, do not get vaccinated for COVID-19, unless providing an accommodation would pose an undue hardship on the operation of the employer’s business.  The analysis for undue hardship depends on whether the accommodation is for a disability (including pregnancy-related conditions that constitute a disability) (see K.6) or for religion (see K.12). 

As with any employment policy, employers that have a vaccine requirement may need to respond to allegations that the requirement has a disparate impact on—or disproportionately excludes—employees based on their race, color, religion, sex, or national origin under Title VII (or age under the Age Discrimination in Employment Act (40+)).  Employers should keep in mind that because some individuals or demographic groups may face greater barriers to receiving a COVID-19 vaccination than others, some employees may be more likely to be negatively impacted by a vaccination requirement.

It would also be unlawful to apply a vaccination requirement to employees in a way that treats employees differently based on disability, race, color, religion, sex (including pregnancy, sexual orientation and gender identity), national origin, age, or genetic information, unless there is a legitimate non-discriminatory reason.