May a judge’s existing real estate LLC rent former law office space to a new lawyer tenant?

Plain-English summary

A judge retained a one-third interest in an LLC owning former law office property. With the judge’s former partner retiring, a personal injury firm offered to rent the property with a four-year purchase option. The property was in a different county from where the judge sat in a multi-judge circuit.

The Commission identified divestiture or renting to nonlawyers as its preferred courses, but permitted the described limited arrangement under Rule 3.11. The judge had to recuse from the tenant firm’s cases, publicly disclose the lease, and report the rental income under Rule 3.15 or other law. The Commission also required ongoing review and immediate divestiture if the arrangement began causing frequent disqualification.

In practice

The permission rests on the existing ownership, proposed purchase option, separate county, case mix and ability to recuse; the opinion attaches disclosure, reporting and divestiture conditions.

Common questions

Q: May the LLC lease to the new law firm?

A: The Commission permitted this particular arrangement subject to the stated conditions.

Q: May the judge hear the tenant firm’s cases?

A: No. The judge must disqualify from those cases.

Q: What if recusal becomes frequent?

A: The opinion directs immediate divestiture of the property.

Background and rules framework

Rule 3.11(A), (C) permits some investments but bars financial activities that interfere with duties, cause frequent disqualification or create continuing business ties with lawyers likely to appear in court. The Commission also cites Rule 3.15 for income reporting and a January 22, 1991 JIC opinion on lawyer tenants.

Citations and references

West Virginia Code of Judicial Conduct:

• Rule 3.11(A), (C), financial activities and lawyer business relationships.
• Rule 3.15, income reporting.

Other opinions cited:

• JIC Advisory Opinion of January 22, 1991, judge-owned property rented to lawyers.

See also

• WV JIC Advisory Opinion 2020-22
• WV JIC Advisory Opinion 2021-12

Source

• Landing page: West Virginia Judicial Investigation Commission advisory opinions
• Original PDF: JIC Advisory Opinion 2019-28, redacted

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

JUDICIAL INVESTIGATION COMMISSION
City Center East - Suite 1200 A
4700 MacCorkle Ave., SE
Charleston, West Virginia 25304
(304) 558-0169 • FAX (304) 558-0831

December 31, 2019

Re: JIC Advisory Opinion 2019-28

Dear Judge

Your recent request for an advisory opinion was recently reviewed by the Judicial Investigation Commission. The factual scenario giving rise to your request is as follows:

You were elected to the bench m May 2018 to a multi-judge/multi-county
jurisdiction. The counties include and , and there are six
judges in the circuit. Four judges sit in _ County, one judge is in County,
and you serve
County. While you can hear any cases originating in any of the
counties in your circuit, your case load is primarily limited to County and conflict cases arising out of County. In fact, since taking office you have only
heard one
County case which occurred after all of the judges sitting there
recused themselves.

Before becoming a judge, you were a partner in a small law firm physically
located in
County. Your firm owned the house where your law office was
located. When you became judge, you liquidated your partnership and you divested yourself from the finn 's 401k retirement plan. However, you are still a 1/3 owner of a separate LLC that owns the real estate in County in which the last of your fonner law partners still practices law.

The third partner retired several years before your election in May 2018 . At the time of your election, your last remaining partner said that he planned on retiring fairly soon and you expected that the real estate would then be sold. The partner has not filed any cases in County, but had he done so, you would have quite rightly recused yourself. Other than receiving an annual accounting and this year, a small profit from

JIC Advisory Opinion 2019-28
December 31 , 2019
Page 2 of3

rents after taxes and repairs, you have no involvement in the management of the building. As you say, you have "in all respects been a silent owner and it has had no effect on my judicial duties."

The last remaining partner is moving forward with retirement, and he recently advised that he has received an offer from a small personal injury law firm to rent the building with a four year purchase option. You have not participated at all in any discussions with the potential renter directly or indirectly. You have no idea whether that
new firm will be filing cases in
County but you recognize that it could at some
point. You want to know if you violate Rule 3.11 of the Code of Judicial Conduct if the LLC of which you are still a member rents the office space to the
firm.

To address your first question the Commission has reviewed Rule 3.11 of the Code of Judicial Conduct which states:

Rule 3.11- Financial, Business, or Remunerative Activities

(A) A judge may hold and manage investments of the judge and members of the judge's family ....

(C) A judge shall not engage in financial activities pennitted under paragraphs (A) and (B) if they will:

(1) interfere with the proper perfonnance of judicial duties;
(2) lead to frequent disqualification of the judge;
(3) involve the judge in frequent transactions or continuing business relationships with lawyers or other persons likely to come before the court on which the judge serves; or
(4) result in violation of other provisions of this Code.
Over the years, the JIC has issued several advisory opinions on the issue of judges renting property to lawyers and has carved out some exceptions for judicial officers who already owned rental property before taking the bench.

In a JIC Advisory Opinion dated January 22, 1991, the Commission held that a judicial officer who owns rental property and has lawyers for tenants engages in unethical conduct unless the judicial officer does one of the following: " (1) sells the property; (2) refers all tenant lawyers to another judge in the circuit for their hearings; or (3) rents only to non-lawyers." The Commission noted that failure to take one of these actions "could suggest partiality, could interfere with the performance of judicial duties, and could

JIC Advisory Opinion 20 19-28
December 3 1, 20 19
Page 3 of3

involve the judicial officer in frequent transactions with lawyers likely to come before his or her court."

The course of action taken by necessity turns on the distinction of facts occurring in each case. While the Commission believes the most appropriate courses are divestiture of the prope11y or renting to non-lawyers, it also finds that in limited circumstances as in this case that a judge may rent his or her property to a lawyer. In this instance, you already own the property and your former partner was occupying the space; there is an option to purchase in the rental agreement; you are in a multi-judge circuit; you sit in
County and the property is located in
; the finn does personal injury
work which is less likely to come before you than more high-volume cases such as criminal and abuse and neglect; and you will disqualify yourself from any cases
involving the
firm. You have an obligation to publicly disclose the rental
agreement and must report the income pursuant to Rule 3 .15 of the Code of Judicial Conduct or other applicable law. Furthennore, the Commission is of the opinion that you must revisit the arrangement on an ongoing basis and if you find that it is leading to your frequent disqualification from cases then you should immediately divest yourself of the property.

It is hoped that this opinion fully addresses the issues which you have raised.
Please do not hesitate to contact the Commission should you have any questions, comments or concerns.

Sincerely,

fl~~,12!;,on
Judicial Investigation Commission

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