Nakayama v Truk [1987] FMCSC 1; 3 FSM Intrm. 565 (Truk S. Ct. Tr. 1988) (17 September 1987)

[1987] FMCSC 1; 3 FSM Intrm 565 (Truk S Ct Tr 1988)

TRUK STATE COURT
TRIAL DIVISION

TSC CIVIL ACTION NO. 120-87

SOLOMON NAKAYAMA,
Plaintiff

V

TRUK STATE GOVERNMENT, AND
GOVERNOR GIDEON DOONE,
Defendants

BEFORE: Soukichi Fritz, Chief Justice, Truk State Court

COUNSEL: Mr. Machime O'Sonis, for the Plaintiff,
Paul Ake, Esq., Acting Attorney General, for the Defendants

HEARING: 16 September 1987 - JUDGMENT: 17 September 1987

HEADNOTES

Attorney, Trial Counselor and Client
Where an attorney seeks to have another attorney disqualified on the grounds that such other attorney was not admitted to the state bar, and the attorney seeking the disqualification should have known that the other attorney was within an exception to that rule, the motion to disqualify is without merit and shall be denied. Nakayama v. Truk, [1987] FMCSC 1; 3 FSM Intrm. 565, 568-69 (Truk S. Ct. Tr. 1987).

Attorney, Trial Counselor and Client
Truk State Bar Rule 13(a), which adopts the Code of Professional Responsibility, prevents conflicts of interest and appearances of impropriety by requiring that members of the state bar conduct themselves in a manner consistent with the American Bar Association's Code of Professional Responsibility. Nakayama v. Truk, [1987] FMCSC 1; 3 FSM Intrm. 565, 570 (Truk S. Ct. Tr. 1987).

Public Officials;
Attorney, Trial Counselor and Client
Under Rule 1.11 of the Truk State Code of Professional Responsibility, a lawyer may not represent a private client in connection with a matter in which the lawyer participated "personally and substantially" as a public officer or employee, unless the appropriate government agency consents after consultation. Nakayama v. Truk, [1987] FMCSC 1; 3 FSM Intrm. 565, 570 (Truk S. Ct. Tr. 1987).

Public Officials;
Attorney, Trial Counselor and Client
For purposes of Rule 1.11, an attorney who, as a government attorney, signs his name to a lease agreement, approving the lease "as to form," is personally and substantially involved. Nakayama v. Truk, [1987] FMCSC 1; 3 FSM Intrm. 565, 571 (Truk S. Ct. Tr. 1987).

Public Officials;
Attorney, Trial Counselor and Client
An attorney holding public office should avoid all conduct which might lead the layman to conclude that the attorney is utilizing his former public position to further his subsequent professional success in private practice. Nakayama v. Truk, [1987] FMCSC 1; 3 FSM Intrm. 565, 572 (Truk S. Ct. Tr. 1987).

FACTUAL BACKGROUND

On August 7, 1987, Plaintiff Salomon Nakayama through his counsel, Mr. Machime O'Sonis, filed a "Complaint for Temporary Restraining Order, a preliminary injunction, and a Breach of Lease Agreement," alleging a breach of a lease agreement by the defendant, Truk State government and the Governor of Truk.

For purposes of this order, the Court regards as true the allegations of the complaint filed by plaintiff pursuant to Truk Rules of Civil Procedure Rule 11 which mandates that "the signature of an attorney or trial counselor constitutes a certificate by him that he has read the pleading; that to the best of his knowledge, information, and belief there is a good ground to support it ...".

Plaintiff's complaint indicates that on April 10, 1986, a lease agreement was contracted between plaintiff and defendants for lease of Yanmar FRO diesel engine fishing boat named "TOKU."

The complaint alleges defendants' breach of contract for failure to abide by the terms of the agreement due to an apparent release of the fishing boat to someone else other than the plaintiff-lessee.

Due to the unavailability of the contracted for fishing boat by release of "TOKU" to someone else other than the named lessee, the complaint continues and states that defendant Governor Doone made a commitment to the plaintiff to receive another similar boat when the next order arrived in Truk.

Approximately one year later the complaint indicated a similar boat named "SOPOR" arrived and that the defendant Governor Doone reaffirmed his previous commitment to the plaintiff to retain custody of the boat "SOPOR."

As of August 28, 1987, the plaintiff-lessee has not yet received any fishing boat subject to the terms of the lease agreement.

The plaintiff's complaint seeks a total of one million dollars ($1,000,000.00) for general, specific, and punitive damages, and a temporary restraining order to restrain the defendants from releasing "SOPOR" to anyone other than the named plaintiff-lessee.

In response to the plaintiff's complaint, the office of the Attorney General on August 18, 1987, filed a Motion to Dismiss the case and disqualify counsel for plaintiff based upon the contention that plaintiff's attorney, Mr. Machime O'Sonis, has formerly represented the government, in his former position as Acting Attorney General of Truk State and represented the government by signing the lease agreement. The defendants' basis for disqualification of counsel is plaintiff's attorney's alleged violation of the Rules of Professional Conduct which states that a lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same matter unless the former client consents after consultation.

Prior to the court hearing on August 28, 1987, which took the issue of disqualification of counsel under advisement, this court issued an amended Temporary Restraining Order on August 21, 1987, ordering the defendants or defendants' attorney to appear on that date and show cause why a temporary restraining order should not be ordered restraining and enjoining the defendant from releasing the fishing boat to any other individual(s) until the matter is resolved.

On August 27, 1987, plaintiff's counsel, Mr. Machime O'Sonis, filed an opposition to defendant's motion to disqualify him as counsel basing his defense on his statement that he was not personally involved in the negotiation of the lease agreement, and that his sole role was to review the blank lease agreement. Mr. Machime O'Sonis stated that he did not draft the lease agreement and was not involved in actual negotiation between the Government and the plaintiff.

Approximately one hour before the scheduled 9:00 a.m. court hearing on this matter, on August 28, 1987, the plaintiff's counsel, Mr. Machime O'Sonis, filed a motion to disqualify defendants' attorney based upon his allegation that the Acting Attorney General, Mr. Paul Ake, failed to comply with the requirement to practice law before Truk State Court as provided for in the Truk State Bar Rules 3,4, and 5.

On August 28, 1987, this Court heard the motions of both attorneys seeking to disqualify each other. This matter was taken under advisement at that time and the issue of attorney disqualification is concluded with the opinion provided herein.

The opinion in Point I focuses upon the denial of plaintiff's motion to disqualify defendants' counsel. Point II addresses the granting of defendants' motion to disqualify plaintiff's counsel.

LEGAL ANALYSIS

Jurisdiction

This Court has jurisdiction under Truk State Charter article V, section 7, and Truk State Law 5-32, as amended.

OPINION

POINT I:

PLAINTIFF'S MOTION TO DISQUALIFY DEFENDANTS' COUNSEL

On August 28, 1987, the day of the court's scheduled hearing to determine defendants' motion to disqualify plaintiff's counsel, the representative for the plaintiff, Machime O'Sonis, filed a motion to disqualify defendant's counsel.

The sole reason and basis cited by Machime O'Sonis in his motion to disqualify the defendant's attorney, Mr. Paul Ake, is that Mr. Ake was not admitted to the State Bar of Truk and is therefore precluded from representing clients in Truk State Court. Cited in support of his allegations in Truk State Bar Rule 3 which indicates, under certain provisions, that a person shall not "practice law in this state unless he/she is a member in good standing of the State Bar of Truk, except as provided in Rule 14." However, another provision, Rule 7, is the prevailing rule and not rule 3 as cited by the plaintiff. (a), "Admission Without Examination - Public Service - Persons excused" provides that:

An applicant who is otherwise qualified for admission under Rule 5 is excused from taking the examination prescribed by Rule 5(a)(4) if he or she is a member of one of the following classes of person:

1. State employees Attorneys and Trial Counselors employed by the State of Truk or one of its branches, agencies or instrumentalities. (Emphasis added).

The Court wishes to remind the plaintiff's counsel that prior to any lawyer signing a pleading that Truk State Court rules require that the attorneys' signature "constitutes a certificate by him that to the best of his knowledge, information and belief, there is good ground to support it; and that it is not interposed for delay." Truk State Court Rule 11.

The plaintiff's counsel, Mr. Machime O'Sonis, should have known his pleading was without merit, because the Truk State Bar Rules clearly provide an exception for attorneys employed by the State of Truk.

Truk State Court Rule 11 additionally provides, "If a pleading ... is signed with intent to defeat the purpose of this rule, it may be stricken as sham and false and the action may proceed as though the pleading has not been served.

It is the decision of this Court that the plaintiff's attorney's motion to disqualify defendants' attorney is without merit.

Accordingly, the Motion to disqualify defendants' attorney is DENIED.

POINT II:

DEFENDANTS' MOTION TO DISQUALIFY PLAINTIFF'S COUNSEL

This court has disqualified the plaintiff's attorney from any further representation and dismissed the case without prejudice for matters unrelated to any actual merit contained within the plaintiff's complaint. Accordingly, this opinion addresses only the issues involved in the disqualification of plaintiff's attorney.

The facts reveal that plaintiff's attorney, Machime O'Sonis, when employed in his former position as Acting Attorney General of Truk, and the legal representative of the Governor, affixed his signature to a lease agreement for a fishing boat.

The alleged breach of contract of this same lease agreement is the subject matter of the civil case presently before this Court.

Machime O'Sonis is now in private practice representing a plaintiff who filed suit against the State of Truk and the Governor for alleged breach of the same lease agreement O'Sonis became involved with as former Acting Attorney General of Truk.

Attorney O'Sonis's current client in this alleged breach of the lease agreement is the same party who was the lessee at the time attorney O'Sonis signed and approved this same lease agreement in his former position as Acting Attorney General of Truk.

This disqualification of plaintiff's counsel is a result of that attorney's failure to abide by the Code of Professional Responsibility, Rule 1.11, which requires consent after consultation with the appropriate government agency prior to a lawyer representing a private client in connection with a matter in which the lawyer formerly participated personally and substantially as a public officer.

This court requires attorneys to abide by the Rules of the State Bar of Truk. The applicable rule utilized here is Rule 13(a): Code of Professional Responsibility observance required. This rule require that "every member of the State Bar shall conduct himself or herself in a manner consistent with the Code of Professional Responsibility as promulgated by the American Bar Association. Rule 13(a) State Bar of Truk.

The specific rule applicable in this instant case is Rule 1.11 of the aforementioned Code of Professional Responsibility entitled, "Successive Government and Private Employment," which provides in Section (a) that "except as law may otherwise expressly permit, a lawyer shall not represent a private client in connection with a matter in which the lawyer participated personally and substantially as a public officer or employee, unless the appropriate government agency consents after consultation ..." (Emphasis added).

The sworn testimony of both defendant and plaintiff yield that no such consultation occurred. Therefore the Office of the Attorney General issued no consent authorizing approval of Machime O'Sonis to act as a representative for the plaintiff.

Machime O'Sonis failed to seek any such consultation and consent as required in Rule 1.11.

Rule 1.11 is governed by two requirements, both which must be observed. The first requirement is that in order to determine if the former attorney's involvement was personal and substantial in connection with a matter the attorney formerly participated in. The second requirement requires approval of the appropriate government agency.

The primary issue becomes centered upon whether the consultation and consent occurred. The degree of involvement remains essentially a moot issue in the absence of the required consultation and consent.

Plaintiff's attorney Machime O'Sonis claims that he did not participate "personally and substantially" in the representation of his former client, the Governor, through the Office of the Attorney General, despite the fact that his signature appears on the lease agreement involved in the current litigation.

Attorney Machime O'Sonis further stated his involvement in the lease agreement at issue stems from the fact this signature only represented the "approved as to form." Indeed, this is the precise wording printed below Machime O'Sonis' signature on the lease agreement.

The word "form" has been defined as "... the legal or technical manner or order to be observed in legal instruments or judicial proceedings, or in the construction of legal documents or processes..." H. Black, Black's Law Dictionary (4th ed.).

The moment Machime O'Sonis signed his name to the lease agreement is the moment he became personally and substantially involved. As the Executive Branch legal representative, Machime O'Sonis was charged with the task of approving the lease agreement. The "form" of the contract constitutes the legal manner to be observed in the construction of legal documents. In order to have the correct format to create a proper form of agreement, the terms and conditions of a contract must adhere to the legal manner customarily observed in the construction of such legal documents.

This Court is not persuaded with Machime O'Sonis's argument that he was not "personally and substantially" involved in the lease agreement. The degree of involvement should have been first presented by Machime O'Sonis to the current Attorney General for consultation to determine if the Attorney General would issue consent authorizing Machime O'Sonis to act as plaintiff's representative. Machime O'Sonis failed to seek such consultation and consent.

This Court finds Machime O'Sonis's involvement was both personal and substantial.

The pivotal issue is not solely the degree of Machime O'Sonis's involvement, however. Machime O'Sonis also owes a continuing duty to his former client to preserve the confidential attorney-client relationship.

"(I)t is the confidential relationship between attorney and client, in reliance upon which the information is imparted by the client to the attorney, and not the confidential nature of the information itself, which creates the disqualification."

United States v. Standard Oil Co., 136 F. Supp. 345 (S.D.N.Y. 1955) (amicus curiae brief of the New York County Lawyers Association submitted pursuant to the request of the Court).

The prevailing theme underlying opinions interpreting this provision of the Code of Professional Responsibility is that an attorney holding public office should avoid all conduct which might lead the layman to conclude that the attorney is utilizing his former public position to further his subsequent professional success in private practice.

This Court must invoke application of the Truk State Bar Rule 13(a) which adopts the Code of Professional Responsibility in order to prevent the demonstrated conflict of interest present and to avoid plaintiff's attorney's appearance of impropriety inherent in this instant case.

The Court finds that Machime O'Sonis's continued representation would be violative of both the letter and the spirit of the criteria embodied in the Code of Professional Responsibility Rule 1.11.

It is the Court's duty to promote confidence and respect for the Bar. Attorneys must abide by the rules of Professional Conduct relating to conflicts of interest and in the preservation of the confidential and privilege attorney-client relationships. Without firm judicial support, the attorney's Canons of Ethics would be without force or effect.

The disqualification of the plaintiff's attorney has resulted in rendering all of the pleadings and papers filed by Mr. Machime O'Sonis in this case to be declared null and void. Any merits of this case, other than disqualification of plaintiff's counsel, remain unresolved;

It is therefore ORDERED that the Defendants' motion to disqualify plaintiff's attorney is hereby granted; and that plaintiff's attorney, Machime O'Sonis, is hereby disqualified from any further representation in the case at bar. Accordingly, this case is dismissed without prejudice.

SO ORDERED.