The Seventh Circuit was faced with several interesting evidentiary rulings pertaining to an alleged conspiracy between an attorney (Attorney Number 1), who became romantically involved after an employment discrimination lawsuit settled, and his Client.
Factually, the Client was going through a divorce and was to obtain funds from a marital settlement. The Client met with Attorney Number 2 and filled out an intake form in which she indicated she was referred to Attorney Number 2 by Attorney Number 1. Prior to the marital settlement being paid, the Client filed for bankruptcy with Attorney Number 2. The Client failed to disclose the martial settlement in her bankruptcy petition and schedules. When she received the marital settlement funds, she cashed the check, gave the funds to Attorney Number 1 who opened several certificate of deposits.
When the ex-husband found out about his wife's (the Client) bankruptcy he reported the undisclosed asset to the Trustee. The Trustee reopened the case and the Client's discharge was revoked and referred for criminal investigation. The Client pleaded guilty to two counts of making a false declaration in a bankruptcy proceeding. After doing so, the grand jury was convened to investigate Attorney Number 1. During the grand jury testimony, the Client testified that Attorney Number 1 did NOT refer her to Attorney Number 2. She was then charged with making a false statement to the grand jury ....because the Client intake form which she filled out stated she was referred by Attorney Number 1.
During the trial, the Client objected to the Client intake form being admitted into evidence. However, it was admitted and she was convicted. An appeal was taken and the Seventh Circuit analyzed that Circuit's test to determine if it was covered by the privilege. The privilege covers "only those communications which reflect the lawyer's thinking or are made for the purpose of eliciting the lawyer's professional advice or other legal assistance." As the intake form pertaining to the referral did neither of these, the Court found it was properly admitted.
Conversely, Attorney Number 1's conviction was overturned based upon hearsay testimony. The Court, in dicta, also examined what the District Court should focus upon on whether the intake form was admissible under the co-conspirator exception along with a discussion on relevant evidence.
In light of the typical Bankruptcy "civil" cases, this criminal case brought back the underlying evidentiary issues which we as bankruptcy practitioners should always keep in our mind when we file motions and handle evidentiary hearings and/or trials.
US v Leonard-Allen and Walter Stern III
No comments:
Post a Comment