“Chutzpah” – Lawyer in Civil Fraud Trial Threatened Opposing Counsel to Gain Advantage – Appeals Minimal Sanction
“Chutzpah” is a Yiddish word meaning unmitigated gall. It is defined as the action of a person who who is convicted of murdering his parents and asks for clemency because he is an orphan.
In Jack Zeev Yetiv v. Commission for Lawyer Discipline, NO. 14-17-00666-CV, State of Texas in the Fourteenth Court of Appeals (March 14, 2019) lawyer Jack Zeev Yetiv, during the middle of a trial, threatened to file a disciplinary grievance against opposing counsel Bruce Wilkin who represented an insurer defending a suit because of insurance fraud, unless Wilkin told the trial judge that Wilkin was withdrawing an argument Wilkin had made in court.
The Commission for Lawyer Discipline brought a disciplinary action against Yetiv for violating Rule 4.04(b)(1) of the Texas Disciplinary Rules of Professional Conduct, alleging that Yetiv threatened to present disciplinary charges “solely to gain an advantage in a civil matter.”
After a bench trial, the trial court found that Yetiv violated Rule 4.04(b)(1), suspended Yetiv from the practice of law for four months, probated the suspension, and ordered Yetiv to pay attorney’s fees to the State Bar of Texas.
Yetiv’s company, Westview, sued its insurance company when the insurance company refused to pay a claim after a fire. See Westview Drive Invs., LLC v. Landmark Am. Ins. Co., 522 S.W.3d 583, 589-91 (Tex. App.—Houston [14th Dist.] 2017, pet. denied). During the trial, Yetiv testified that he delayed reporting the fire to the insurance company and a bankruptcy trustee on the advice of his counsel, Edward Rothberg. When the insurance company subpoenaed Rothberg, Westview moved to quash based on attorney-client privilege. Wilkin, one of the insurance company’s lawyers, argued that the privilege had been waived for several reasons, including the crime-fraud exception—in particular, bankruptcy or insurance fraud.
The trial court ruled that the crime-fraud exception applied and allowed the discovery.
While trial was in recess Yetiv sent an email to Wilkin, that threatened to file a grievance against Wilkin “unless, by noon on Monday, you announce in open court that you now realize that there was no factual or legal basis for your allegations, and that you are sorry for having made them and that you now withdraw them ENTIRELY.” Yetiv continued, “If you do make the above statement—the language of which will have to be agreed upon—I will release you and [your firm] from all potential liability in connection with the statement you made and will agree not to file a grievance against you and [your firm] with the State Bar or related authorities.” Yetiv encouraged Wilkin to “[t]hink about it carefully.” Yetiv concluded, “Choose wisely.”
Wilkin did not make the statement requested by Yetiv. Westview presented additional witness testimony, and both parties rested and closed. The jury found in favor of the insurance company. Ultimately, the trial court sanctioned Yetiv for sending the email, and the court of appeal affirmed the jury’s verdict and the sanction.
In this disciplinary proceeding, Wilkin testified that Yetiv’s threat was “a trial tactic…” Wilkin also testified that before Yetiv had sent the email, it was a very real possibility that Wilkin would have called Rothberg to testify. The goal for subpoenaing Rothberg in the first place was to show that Yetiv’s new excuse for his not reporting the fire was not credible.
At the conclusion of trial, the court found that Yetiv violated Rule 4.04(b)(1), and the court ordered a four-month suspension, fully probated, and a sanction of $4,500 in attorney’s fees.
In his first issue, Yetiv contends that the trial court erred by considering “undisclosed extra-record evidence.” Yetiv did not object to the trial court’s consideration of matters that were not in evidence. Yetiv raised the complaint for the first time in his motion for new trial after the trial court signed its judgment.
A party cannot wait until the trial is finished, then seek to reverse an unfavorable verdict by complaining of an error which the trial court could have corrected had it been timely informed of the error.
Yetiv had the opportunity to raise this complaint at trial, but he did not raise it until after the trial court signed its judgment. Yetiv’s complaint was not timely because it was made for the first time in a motion for new trial. Thus, no error is preserved.
LEGAL AND FACTUAL SUFFICIENCY OF THE EVIDENCE
Yetiv contends that this court “should not make any presumption in this appeal against Yetiv” and that this court should give no deference to the trial court’s judgment.
The trial court found: “Respondent violated the following Texas Disciplinary Rules of Professional Conduct: Rule 4.04(b)(1) [a lawyer shall not present, participate in presenting, or threaten to present: criminal or disciplinary charges solely to gain an advantage in a civil matter].”
Regardless of whether Yetiv is challenging an implied or express finding that he violated Rule 4.04(b)(1), the standard of review for challenges to implied and express findings is the same. In this case, there was only one available legal theory for the trial court to consider: whether Yetiv violated Rule 4.04(b)(1). The trial court made the necessary finding, and Yetiv has shown no harm from the trial court’s purported failure to file separate findings.
Yetiv also contends that there is no evidence or insufficient evidence to prove he made the threat of disciplinary charges to “gain an advantage” in a civil matter or, in the alternative, Yetiv contends that even if there was an advantage to be gained, the threat was not made “solely” to gain an advantage.
In the threatening email, Yetiv made a threat conditioned on Wilkin’s response, stating that Yetiv would file a disciplinary charge unless Wilkin took specific action during the trial. No doubt, this action would have bolstered Yetiv’s credibility in front of the trial court and lessened Wilkin’s credibility. This action would have resulted in an “advantage” for Yetiv in the civil matter, however slight.
The court of appeal may not rule because it disagrees with the trial court’s reasonable determinations of credibility. The evidence at trial would enable reasonable and fair-minded people to conclude that Yetiv sought an advantage in a civil matter, and this finding is not so against the great weight and preponderance of the evidence as to be manifestly unjust.
Intent is a fact question uniquely within the realm of the trier of fact because it so depends upon the credibility of the witnesses and the weight to be given their testimony. Since intent is not susceptible to direct proof, it invariably must be proven by circumstantial evidence. The trial court could have disbelieved Yetiv’s self-serving testimony and statements in the email concerning his motive for threatening a disciplinary charge against Wilkin.
By the time Yetiv threatened Wilkin, the trial judge in the Westview case had already held a hearing at which Yetiv and Rothberg testified. Thus, Yetiv had a full opportunity to clear his reputation in open court, yet the judge still ruled that the crime-fraud exception applied.
The evidence in this case would enable reasonable and fair-minded people to conclude that Yetiv threatened Wilkin with a disciplinary charge solely to gain an advantage in a civil matter, and this finding is not so against the great weight and preponderance of the evidence as to be manifestly unjust.
Threatening to use the criminal or disciplinary process solely to coerce a party in a private matter improperly suggests that a lawyer can manipulate the criminal process for personal gains and manipulate the legal system for personal advantage. Creating such a false impressions is an abuse of the legal system that diminishes public confidence in the legal profession and in the fairness of the legal system as a whole.
It takes a great deal of “Chutzpah” to litigate as a party and counsel a case where a jury found for the insurer who claimed it was a victim of insurance fraud to try to effect the trial by threatening defense counsel with discipline if he did not take back in open court the allegations against Yetiv, acting both as a party plaintiff and counsel for his own company. The threatened lawyer refused to comply with the threat, informed the trial judge, won at trial and obtained sanctions for Yetiv’s wrongful conduct. Counsel for the insurer should be commended for refusing to be threatened and for establishing Yetiv’s fraud and Yetiv’s discipline was minimal considering the severity of his wrongful conduct.
© 2019 – Barry Zalma
This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
Passover Seder for Americans
Passover is one of the many holidays Jewish people celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being?
All Jewish fathers are required to teach their children, at least once a year at the Passover holiday, about the exodus from slavery in Egypt. For American Jews who have difficulty understanding Hebrew and complicated books describing the Exodus, my wife and I wrote this book to use for our own Seder where each member of the family reads part of the book.