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Or. Code Prof. Resp. DR 5-103(A) provides that a lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation he is conducting for a client, except that he may: (1) acquire a lien granted by law to secure his fee or expenses or (2) contract with a client for a reasonable contingent fee in a civil case. DR 5-103(B) states that while representing a client in connection with contemplated or pending litigation, a lawyer shall not advance or guarantee financial assistance to his client, except that a lawyer may advance or guarantee the expenses of litigation, including court costs, expenses of investigation, expenses of medical examination, and costs of obtaining and presenting evidence, provided the client remains ultimately liable for such expenses.
Ray G. Brown had represented the client's parents. The client had hired another lawyer to represent her in a personal injury action, but asked Brown to loan her money. Brown agreed to loan her money if she transferred her personal injury action to him. She signed a receipt prepared by the other lawyer stating that she was transferring her case to Brown because he promised to loan her money, which were to repaid from the proceeds of her personal injury claim. Brown prepared an affidavit for the client's signature stating that the language of the receipt signed by the client was untrue and that Brown never agreed to loan her money. Cancelled checks were produced showing that Brown had loaned money to the client. The Oregon State Bar filed a complaint against Brown accusing him of unethical conduct in two separate causes. The first cause accused Brown of improperly advancing money to a client. The second cause alleged that Brown created false evidence by obtaining from the client an affidavit denying the advancement of the money. The Trial Board found Brown not guilty of both causes. The six member Disciplinary Review Board found Brown not guilty of the first cause and guilty of the second cause.
Did Brown acquire an interest in the litigation by advancing money the client for her personal use?
The court held that Brown acquired an interest in the client's litigation by advancing her money for her personal use and found that Brown violated DR 5-103(B). The court concluded that DR 7-102(A)(4) was inapplicable as Brown did not create the false evidence in representation of a client, but did violate DR 1-102(A)(4) and (6) by obtaining the client's signature on an affidavit he knew to be false.