Does a lawyer have to report another lawyer for filing an attorneys'-fee motion that the other side says a settlement waived, when the parties dispute what the settlement covered?

Plain-English summary

A firm settled a federal civil-rights case under a joint stipulation that, according to the Commonwealth's official, was intended to end the litigation including the prayer for attorneys' fees. Thirty days after the dismissal order, the firm moved for attorneys' fees as a "prevailing party," arguing that the fee waiver was not a "special circumstance" barring a statutory fee award. The inquiring lawyers, from the Office of the Attorney General, asked whether the firm's conduct was proper under DR 7-102(A)(2) and whether they had a duty to report it.

The committee distinguished its earlier LE Op. 536, which assumed a fee agreement had actually been reached, and pointed out that here the parties materially disagreed about whether the settlement's reference to "costs" included attorneys' fees. Because a committee cannot resolve a factual dispute, it declined to opine under DR 7-102(A)(2) on whether the fee motion advanced an unwarranted claim; that determination, it said, is for a finder of fact, potentially the court ruling on the pending fee motions.

On the reporting question, the committee concluded that with no factual finding yet made, any obligation to report was not ripe. It explained that DR 1-103(A) requires reporting only when a lawyer has information indicating a violation that raises a substantial question as to another lawyer's fitness to practice, and even then the reporting lawyer makes a subjective judgment about that fitness threshold. Should a court later find the conduct improper, and should the AG lawyers also believe it raised a substantial fitness question, the duty to report would then attach.

Currency note

The Virginia State Bar's editor's note states that this opinion was overruled in part by LE Op. 1528 (see footnote 1 of that opinion for scope). Treat the conclusions below as the historical record, qualified by that later opinion.

This opinion was issued in 1990, under Virginia's former Code of Professional Responsibility (the disciplinary rules it cites), before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. As the committee note observes, a lawyer who learns of misconduct through a client confidence may report only with the client's consent under current Rule 1.6(c)(3). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Did the committee decide whether the fee motion was an improper claim?

A: No. Because the parties disputed whether the settlement waived attorneys' fees, the committee said the question turned on a factual dispute it was not constituted to resolve, so it declined to opine under DR 7-102(A)(2). It noted the court ruling on the fee motions could make that determination.

Q: Why was the duty to report not yet ripe?

A: The committee concluded that without a factual finding that the conduct was improper, there was no basis to treat the duty under DR 1-103(A) as triggered. It said the obligation would arise only if a court found the conduct violated the Code and the AG lawyers believed that violation raised a substantial question as to the lawyer's fitness to practice.

Q: Why didn't the committee's earlier LE Op. 536 control?

A: The committee explained that LE Op. 536 assumed a fee agreement had in fact been reached, whereas here there was a genuine dispute over whether the settlement's "costs" language included attorneys' fees. With the predicate fact in dispute, the committee said 536 was not dispositive.

Background and rules framework

The opinion interpreted former Virginia DR 7-102(A)(2) (a lawyer must not knowingly advance an unwarranted claim or defense unless supportable by a good-faith argument for extending, modifying, or reversing existing law) and DR 1-103(A) (the duty to report another lawyer's violation that raises a substantial question as to fitness to practice). The reporting duty now appears as Virginia Rule 8.3, and the limit on frivolous claims as Rule 3.1; the committee note adds that current Rule 1.6(c)(3) governs reporting when the information is a client confidence.

Citations and references

Rules of Professional Conduct:

• Former Virginia DR 7-102(A)(2) (knowingly advancing an unwarranted claim)
• Former Virginia DR 1-103(A) (duty to report misconduct raising a substantial fitness question)
• ABA Model Rule 8.3 (reporting professional misconduct); Model Rule 3.1 (meritorious claims)

Cases:

• In re Himmel, 125 Ill. 2d 531, 533 N.E.2d 790 (Ill. 1988), discipline for failing to report another lawyer's misconduct.

Other opinions cited:

• Virginia LE Op. 536: declining a fee award where a fee agreement had been reached.
• Virginia LE Op. 1093: reporting obligations.
• Virginia LE Op. 1528: overrules this opinion in part (see its footnote 1 for scope).

See also

• VA LEO 1528: When False Statements Trigger a Report
• VA LEO 1429: Duty to Report a Knowingly False Pleading
• VA LEO 1562: A Fee Arbitration Committee's Duty to Report
• VA LEO 1646: Timing of a Report During a Pending Civil Matter

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/1308.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Committee Opinion
October 19, 1990
LEGAL ETHICS OPINION 1308

FEES – MISCONDUCT –
REPRESENTING A CLIENT WITHIN
THE BOUNDS OF THE LAW:
ATTORNEY WHO FILES A MOTION
FOR ATTORNEYS’ FEES AFTER
ENTRY OF ORDER DISMISSING
MATTER SUBJECT TO JOINT
STIPULATION WHICH PRECLUDED
SEEKING ATTORNEYS’ FEES.

You have advised that a member of the Virginia State Bar is a member of an out-of-state firm which filed suit in a federal district court located in Virginia, asserting against agencies and officials of the Commonwealth of Virginia two claims pursuant to 42 U.S.C. § 1983. The suit was dismissed and an appeal was filed in the United States Court of Appeals for the Fourth Circuit. Before the appeal was decided, the parties negotiated a settlement which provided that (1) the litigation, which in the prayer for relief sought attorneys' fees under § 1988, would be ended; (2) the parties would file a joint stipulation asking the court of appeals to dismiss the appeal with prejudice; (3) the district court would be asked to dismiss with prejudice whatever was left of the case if any remand occurred before the settlement had been completely approved; and (4) the parties would bear their own costs.

You have further indicated that the appellate court accepted the joint stipulation before any decision was rendered and dismissed the appeal without any remand. You relate that, thirty days after entry of the order of dismissal, the firm representing the plaintiff filed motions for attorneys' fees in both the court of appeals and the district court, "claiming to be a 'prevailing party'" under the applicable U.S. Code section and asserting "in its pleading that an agreement waiving fees was not a 'special circumstance' that should bar the award of fees under the statute."

Finally, you have informed the Committee that the official of the Commonwealth who approved the settlement has submitted an affidavit stating unequivocally that it was his understanding that the settlement "was intended to end the litigation in its entirety including the prayer for attorneys' fees," an understanding with which his counsel in your office agrees entirely.

You ask that the Committee opine on the propriety of the conduct of the firm, in particular the firm member who is a member of the Virginia State Bar, in moving the courts for awards of attorneys' fees following the entry of the settlement agreement and in light of the Committee's prior opinion number 536. In addition, you ask for the Committee's determination as to the obligation of involved lawyers in the Office of the Attorney General to report the matter to the appropriate disciplinary authority.

The appropriate and controlling rules relative to your inquiry are DR:7-102(A)(2), which precludes a lawyer from knowingly advancing a claim or defense that is unwarranted under existing law, except that he may advance such claim or defense if it can be supported by good faith argument for an extension, modification, or reversal of existing law, and DR:1-103(A) which, in pertinent part, requires that a lawyer, having information indicating that another lawyer has committed a violation of the Disciplinary Rules that raises a substantial question as to that lawyer's fitness to practice law in other respects, shall report such information to the appropriate professional authority.

In rendering its prior LE Op. 536, the Committee was presented with an inquiry which recited that an agreement on attorneys' fees had in fact been reached during settlement negotiations in a federal civil rights action. The inquiry specifically requested an opinion predicated on the plaintiff's attorney having agreed to "whatever the defendant offer[ed] as to attorneys['] fees, so as not to hinder in any way the most advantageous settlement for the client." Thus, the inquiry presented hypothetical facts which demonstrated that a meeting of the minds on attorneys' fees had occurred. The Committee is not constituted to resolve factual disputes since those are legal issues beyond the purview of the Code of Professional Responsibility. Thus, LE Op. 536 is not dispositive of the question you raise since, in your facts, there appears to be a material difference between the parties as to the intent of the settlement agreement with regard to whether the term "costs" refers also to attorneys' fees and whether, therefore, an agreement was reached on that issue. Since there is a factual dispute, this Committee declines to render an opinion based on DR:7-102(A)(2) in determination of the propriety of the attorney's or firm's conduct. Such a determination must be made by a finder of fact and may apparently be made by the court of competent jurisdiction, ostensibly within its ruling on the pending motion(s) for attorneys' fees.

Since no determination has yet been made by a finder of fact as to the propriety of the attorney's conduct in filing motions for attorneys' fees, the Committee is of the opinion that any obligation to report such conduct is not yet ripe. Should a conclusion be reached by the court which finds the conduct to have been improper and violative of the Code of Professional Responsibility, and should lawyers of the Office of Attorney General who were involved in the matter also believe that such violation raises a substantial question as to that lawyer's fitness to practice law in other respects, they would then have the duty to report that information to the appropriate authority. (See LE Op. 1093) The reporting of misconduct in the absence of a factual finding, however, is based upon a subjective determination that the lawyer has "information indicating" such a violation and even then reporting is not obligatory unless the complainant is satisfied that the violation which has occurred raises a substantial question as to that lawyer's fitness to practice law in other respects. The Committee recognizes the obligation to report misconduct as an integral part of a lawyer's professional responsibility, but cautions that such reports must be made in concert with factual determinations and an analysis of the impact on the offending lawyer's fitness to practice law. (See In re Himmel, 125 Ill.2d 531, 533 N.E.2d 790 (1988))

Committee Opinion
October 19, 1990

Legal Ethics Committee Notes. – If information about the ethics violation is a client confidence, a lawyer may report the other lawyer’s misconduct only if the client consents under Rule 1.6(c)(3); the lawyer considering whether to report must consult with the client under that Rule.

Editor’s Note. – Overruled in part by L. E. Op. No. 1528. See footnote 1 of the opinion for scope.