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Full disclosure under Iowa Code of Professional Responsibility for Lawyers DR 5-105(D) requires the attorney not only to inform the prospective client of the attorney's relationship with the seller, but also to explain in detail the pitfalls that may arise in the course of the transaction which would make it desirable that the buyer obtain independent counsel.
Complainant, Iowa Supreme Court Board of Professional Ethics and Conduct, charged respondent attorney, John C. Wagner, with violating Iowa Code of Professional Responsibility for Lawyers DR 5-101(A), DR 5-105(B), and DR 5-105(C). DR 5-101(A). Complainant alleged that respondent represented both the buyer and the seller in a commercial transaction in which respondent had a financial stake and failed to make full disclosures to the buyer. The Grievance Commission ("Commission") found that complainant established the alleged violations, and it recommended a three-month suspension.
Under the circumstances, did respondent violate the Iowa Code of Professional Responsibility for Lawyers, thereby warranting his suspension from the practice of law for three months?
After carefully reviewing the record, the Court concurred in the Commission's findings and recommendation. The findings of fact showed that although respondent informed buyer and seller that he was representing both parties in the transaction, and about a possibility of a conflict of interest, respondent did not disclose to buyer his commission arrangement with seller or explain why buyer should obtain separate counsel. The Court noted that buyer had a right to expect competent, disinterested advice that would allow him to make an informed decision. Accordingly, the Court suspended respondent's license to practice law in the state with no possibility of reinstatement for three months from the filing date of the opinion.