1.Meeting with Chief Justice

Mr. Johnson reported on the June 22, 1999 meeting with Chief Justice Carson. Also present were Ms. Garst, Mr. Oleson and Mr. Riemer. Matters discussed included an update on judicial bills and that no new judgeships were funded by the legislature. The Chief Justice agreed to co-sponsor a Low and Moderate Income Legal Services Study.

2.Reports from regional HOD meetings

Mr. Johnson discussed feedback from the first round of regional HOD meetings held in June and July and potential resolutions from delegates. A second round of regional HOD meetings is scheduled in late August to review the final HOD agenda.

3.Senator Gordon Smith letter regarding the Federal Ninth Circuit Reorganization Act

Mr. Johnson discussed Senator Smith’s request for additional information regarding the bar’s opposition to the Federal Ninth Circuit Reorganization Act. Ms. Stevens will forward Senator’s Smith’s to the Federal Procedure & Practice Section for its comments, and will send a letter to Senator Smith that a response is forthcoming.

4.Correspondence from bar-related groups

Mr. Johnson reported that he had received a letter from the Campaign for Equal Justice thanking the BOG for its support. He also commented on a form letter received from the Classroom Law Project (CLP), addressed to former executive director Celene Greene, asking for donations and criticizing the BOG for donating only $20,000 to its program. Mr. Johnson indicated he will reply to CLP executive director Marilyn Cover.

2.Tentative topic for November BOG retreat -Development of strategic plan (general and three-year)

Ms. Garst explained it is the intent that strategic planning be the main topic of this year’s BOG retreat and future retreats. All members of the Strategic Planning Committee will be invited to participate in the one-day planning session. In the future it may be possible to involve both incoming and outgoing board members in the retreat if the bar year is changed to January 1.

1.August 10 conference call meeting to approve HOD agenda

Ms. Garst reminded board members of the importance to be available for the special board meeting to approve the HOD agenda on August 10 at noon.

Action:Edwin A. Harnden was elected 1999-2000 President-Elect for. (Ballot count by candidate: Harnden 8 - Baldwin, Burrows, Cohen, Harnden, Hytowitz, Lopez, Rew, Tyner; Scott 1 - Scott; Sowle 6 - Hittle, Johnson, Orf, Rinehart, Sowle, Sumner; absent - Davis).

Action:Mr. Baldwin moved, Ms. Rinehart seconded, to elect Lawrence B. Rew as 1999-2000 President. The motion was approved by the board (15-0-1; absent Davis).

Action:Mr. Hytowitz moved, Ms. Burrows seconded, to elect Richard C. Baldwin and David M. Orf as 1999-2000 Vice Presidents. The motion was approved by the board (15-0-1; absent Davis).

1.CSF Claim Nos. 98-28 and 98-29 - Loveness v. Belcher (Mr. Hilton)

Mr. Scott asked the board to consider CSF Claims No. 98-28 and No. 98-29, each in the amount of $50,000. The CSF Committee’s recommendation to pay claim No. 98-28 was carried over from the June 5 board meeting and, as requested by the BOG, discussed further by the CSF Committee at its June 12 meeting. Claim No. 98-29 was denied by the committee and was before the BOG on the claimant’s request for board review. The CSF Committee’s recommendation regarding each claim is unchanged. Committee member Frank Hilton was present by conference call and asked Ms. Stevens to comment on the matter. Ms. Stevens reviewed the committee’s thinking on the first of the two loans, that it is eligible for payment not because of any lawyer/client relationship but because in that transaction Mr. Belcher was collecting and disbursing the payments before absconding with the balloon payment. The committee concluded that Mr. Belcher was acting as a fiduciary in a matter related to his practice of law, in part because he contends he is the borrower’s lawyer and that makes the claim eligible for payment based on CSF Rule 2.5.2. Mr. Hilton concurred with Ms. Stevens’ overview of the claim.

Mr. Scott suggested that the real intent of CSF Rule 2.5.2 is that theft from the trust account be ancillary to the claimant’s relationship with the client and that this type of claim was not contemplated when that rule was adopted. Mr. Baldwin agreed with Mr. Scott. A lengthy discussion ensued.

Action:Mr. Scott moved, Mr. Orf seconded, to deny CSF Claim Nos. 98-28 and 98-29 - Loveness v. Belcher and Loveness Trust v. Belcher. The motion was approved by the board (14-1-1; no Lopez; absent Davis).

2.Amendments to CSF Rules 2.2 and 6.2

Mr. Hilton reviewed the proposed amendment to CSF Rule 6.2 that would increase the reimbursement from any one CSF claim from $50,000 to $100,000 for estates or trusts having more than one beneficiary, provided that no single beneficiary could receive more than $50,000. Mr. Hilton indicated the CSF Committee felt it was responsible to increase limits as a matter of policy. The board discussed the pros and cons of the matter and the possible increase in trust matters with large estates. The board took no action on the committee’s recommendation to amend CSF Rule 6.2.

Mr. Hilton presented the proposed amendment to CSF Rule 2.2 regarding the definition of dishonest conduct by an attorney. The proposed language codifies how the CSF Committee decides claims cases involving attorney fees. Mr. Johnson indicated that his prior concerns about the rule amendment were addressed by Mr. Hilton and the exhibit materials. A question and answer period ensued.

Action:Mr. Scott moved, Mr. Hittle seconded, to approve the amendment to CSF Rule 2.2 regarding dishonest conduct by an attorney. The motion was approved by the board (15-0-1; absent Davis).

3.Review denial of CSF Claim No. 99-12 - Reinier v. Dewey

Mr. Scott presented the claimant’s request to review the Client Security Fund’s denial of the claim for reimbursement in the amount of $555.00. He indicated this claim relates to the amendment to CSF Rule 2.2 just approved by the board. Mr. Dewey established a retainer amount and an hourly rate, and after performing some work he just quit providing service to Ms. Reinier. Mr. Scott felt it was a valid claim. Ms. Stevens explained that this claim is indicative of the difficulty faced by the CSF Committee in assessing unearned advance payments. The board discussed the matter at length.

Action:Mr. Orf moved, Mr. Hytowitz seconded, to approve CSF Claim No. 99-12 - Reinier v. Dewey in the amount of $550.00 and waive the requirement for a judgment in the matter. The motion was approved by the board (13-2-1; no Hytowitz, Johnson; absent Davis).

The board met in executive session to discuss Ms. Garst’s annual performance review.

Action:The Executive Director Review Special Committee moved to accept the 1999 Executive Director performance review for Karen Garst, including a proposed salary increase and to renew Ms. Garst’s employment contract, effective January 1, 2000 for one year. The motion was approved by the board (15-0-1; absent Davis).

Mr. Rew presented the recommendations of the Budget & Finance Committee for the year 2000 Executive Summary Budget as shown on agenda exhibit pages 26-38. The board discussed the pros and cons of (item No. 5) changing the bar’s operating reserve from 20% of non-dues revenues to an annual cap of $500,000 by revising BOG Policy 10.101(B)(1) as follows: The operating reserve of the General Fund shall be equal to $500,000 20% of the annual operating budget for non-dues revenue, but may be permitted by the BOG in a range of $450,000 to $550,000 17.5% to 22.5% without increasing or decreasing dues. The policy was further reworded as shown in the motion below:

Action:The Budget & Finance Committee moved to amend BOG Policy 10.101(B)(1) (Item No. 5) to read as follows, 'The operating reserve of the General Fund shall be $500,000. The motion was approved by the board (14-0-1; absent Davis).

Item No. 2 recommended to approve in concept a consumer advocate program and to refer it to the Policy & Governance Committee for implementation. Ms. Garst suggested it would be appropriate for this and other proposed programs to come through the Strategic Planning Committee prior to review by the Policy & Governance Committee, and before being presented to the BOG. This is the direction proposed by the Strategic Planning Committee to define and evaluate programs in order to effectively prioritize and allocate bar resources. It was agreed to consider the consumer advocate program in concept, but to exclude mention of implementation at this time.

Action:The Budget & Finance Committee moved to approve the concept the consumer advocate program (Item No. 2) for consideration by the Strategic Planning Committee and possible inclusion in the 2000 budget. The motion was approved by the board (14-0-1; absent Davis).

Action:The Budget & Finance Committee moved to include in the 2000 Budget $20,000 for the Classroom Law Project (Item No. 1), and to deny the request of the Business Law Section for the bar to commit $10,000 for two years to the Oregon Emerging Business Initiative (Item No. 3). The motion was approved by the board (14-0-1; absent Davis).

Budget Item No. 4 was approved under minutes item 4.C.2. shown below.

Mr. Rew presented Item No. 4 in the 2000 Budget proposing that the increase in the member fee be increased from $12 to $25 on inactive members, active emeritus, and active retired, if not paid by the due date. The annual membership fees and Client Security Fund assessments are unchanged from 1999 in the 2000 fee resolution. The only changes refer to payments of fees not made by the due date.

Ms. Stevens suggested that the fees for specific bar programs, such as Client Security Fund and Affirmative Action, be specified in the resolution and discussed related statutory requirements. Mr. Hittle questioned why, at a time when the Affirmative Action Program is being questioned, is its $30 fee being omitted from the fee statement so it appears to have disappeared? How will this be perceived by the members? What is the rationale for taking it out? Ms. Garst explained that when the board voted to exclude the fee assessment details from the fee statement it was with the understanding that the details would be included in the fee resolution (which is sent to every member). The fee statement will include a footnote explaining the various dues and fees which are not itemized. It was proposed to approve the 2000 fee resolution by modifying the fee resolution to provide a total amount in 1A and 1C, and to not list the items for the three separate parts.

Action:The Budget & Finance Committee moved to modify the fee resolution to provide a total amount in 1A and 1C, and to not list the items for the three separate parts (see attached exhibit), to be submitted the 1999 House of Delegates. The motion was approved by the board (8-7-1; no Cohen, Hittle, Johnson, Orf, Rinehart, Sowle, Tyner; absent Davis).

Action:The Budget & Finance Committee moved to approve increasing the member late fee from $12 to $25 on inactive members, active emeritus, and active retired in the 2000 Budget; and to submit the 2000 Fee Resolution to the 1999 House of Delegates. The motion was approved by the board (14-0-1; absent Davis).

EXHIBIT, p. 1-2

Mr. Hittle reviewed the difficulties encountered with PLF involvement in House Bill 2226 regarding child abuse and the subsequent article published by Steve Duin. The series of events which led up to the problems was discussed as well as efforts at damage control. Ways to avoid similar problems in the future were considered such as pre-session agreements about the scope of positions to be taken by the PLF. He felt that the weekly Public Affairs Committee conferences were an effective communication tool, and that minutes needed to be taken at these sessions even when no quorum is present. Concern was expressed about what resolutions may be presented by the HOD in this regard. Mr. Hittle suggested getting together with the principals involved to discuss ideas for resolution in the future.

Mr. Johnson explained that the board is being asked to recommend to the Oregon ABA delegates to urge that more study be done on the Multidisciplinary Practice (MDP) resolution at the 1999 ABA Annual House of Delegates meeting. The board discussed the matter and its role to make recommendations to the Oregon ABA delegates. There was consensus to support the Florida Bar resolution which 'urges that the American Bar Association make no change, addition or amendment to the Model Rules of Professional Conduct unless and until extensive and well-reasoned analysis demonstrates that such change will further the public interest without sacrificing or compromising lawyer independence and the legal profession’s tradition of loyalty to clients.'

Action:Mr. Hytowitz moved, Ms. Burrows seconded, to request that the Oregon State Bar’s ABA delegates support at the 1999 ABA Annual House of Delegates meeting the Florida Bar resolution (stated above) that urges more study be done on the Multidisciplinary Practice (MDP) resolution. The motion was approved by the board (15-0-1; absent Davis).

Mr. Harnden reported that an agreement had been prepared, but is being amended to provide for interim payments rather than a lump sum at the conclusion.

Mr. Harnden indicated that $10,000 would be raised outside of bar funds for the minority experience study and that $4,500 had been received to date.

1.Reappointment of public member Mary McCauley Burrows to 1999-2003 term

Mr. Orf recommended the reappointment of public member Mary McCauley Burrows to a four-year term. Ms. Burrows filled the unexpired term of Liliana Olberding in 1998 with the understanding she would be reappointed to a full term.

Action:The Public Member Selection Special Committee moved to appoint Mary McCauley Burrows as 1999-2003 public member to the Board of Governors. The motion was approved by the board (15-0-1; absent Davis).

Mr. Johnson asked the board to review preliminary 1999 HOD agenda items. The history of amendments to DR 5-106, regarding lawyers as mediators, was discussed. Changes to the DR have involved Mr. Riemer, Ms. Stevens, Ms. Fishleder of the PLF, the Alternative Dispute Resolution Section and the Legal Ethics Committee. Revisions proposed by both groups were discussed at length.

Action:Ms. Cohen moved, Ms. Burrows seconded, to approve amendments to DR 5-106 (shown in the attached exhibit). A friendly amendment was accepted to remove the words 'or proceeding' from DR 5-106 (D). The motion was approved by the board (15-0-1; absent Davis).

EXHIBIT, p. 3

Mr. Harnden proposed the attached BOG resolution regarding funding for legal services be considered for the 1999 House of Delegates agenda.

Action:Mr. Scott moved, Mr. Tyner seconded, to approve the attached Resolution in Support of Adequate Funding for Legal Services for Low-Income Oregonians to be submitted to the 1999 House of Delegates. The motion was approved by the board (15-0-1; absent Davis).

EXHIBIT, p. 4

Mr. Johnson and Ms. Garst volunteered to review the 1999 HOD agenda to make recommendations to the board regarding topics and presenters at the August 10 special board meeting.

Mr. Johnson reported that the attached meeting notice has been distributed for HOD members to review the 1999 HOD agenda in late August.

EXHIBIT, p. 5

Action:Ms. Sowle moved, Mr. Harnden seconded, to approve the following consent items excluding 7.D.3 (removed for separate consideration). The motion was approved by the board (15-0-1; absent Davis).

1.1999-2000 Committee Appointments

2.Appointment to Council on Court Procedures

3.Appointment to Commission on Judicial Fitness & Disability

4.Appointments to MCLE Board

5.Appointments to PLF Board

6.Appointments to SPRB

7.Appointments to Clackamas/Linn/Marion County LPRC

8.LPRC Appointments

9.Appointments to Bar Counsel Panel

10.Appointment to Oregon Law Commission

11.Appointment to Chief Justice’s Criminal Law Advisory Committee

12.Appointment of Public Members to the House of Delegates

13.Public Members for other committees

EXHIBIT, p. 6-13

1.Proposed revisions to BOG Policy 3.300(E), Special Award of Appreciation

Mr. Scott requested to remove this item from the consent agenda for separate consideration. He proposed to amend the CSF Committee’s recommendations to delete the proposal to issue two checks to the 'joint payees.' Mr. Scott found no evidence in the file to explain why a third party (mother and grandmother) wrote the check for Dewey (a minor at the time). He felt it is unprecedented for the committee to decide that the person who paid in the money should be a joint payee on the check. Ms. Stevens indicated that the CSF Committee had the same concerns about whether the funds were a loan or a gift to the client and that this way Dulis and his family can settle it between themselves.

Action:Mr. Scott moved, Mr. Hittle seconded, to approve CSF Claim No. 99-10 - Dulis v. Dewey with the disbursement being paid to the claimant and only to the claimant. The motion was approved by the board (15-0-1; absent Davis).

E.Policy & Governance Committee

1.Proposed value statements

A.Report of the Executive Director

1.Operations Report

B.Client Security Fund Committee

1.CSF Claims Report

No items were discussed.

The meeting was called to order by President Johnson on Friday, July 23, 1999 at 11:50 a.m. All members of the Board of Governors were present with the exception of Gordon Davis. Staff present were Karen Garst, Executive Director; Sandy Hise, Executive Assistant; and Sylvia Stevens, Assistant General Counsel.

(ORS 192.690(1))

A.Consent Agenda

1.Michael Bruce - #82206

2.Christopher S. Byrne - #93517

3.John C. Carraway - #96172

4.Michael G. Monnolly - #97146

B.Further Agenda

1.James S. Drew - #74080

Action:Mr. Scott moved, Mr. Sumner seconded, to decline authorizing an injunctive lawsuit of UPL No. 97-7 - John Salter. The motion was approved by the board (14-0-1-1; absent Davis; abstaining Lopez).

Action:Mr. Rew moved, Mr. Sumner seconded, to present the BOG’s position to the PERS Board in a memorandum marshaling all of the arguments about the bar’s governmental status before seeking a private letter ruling with the IRS. The motion was approved by the board (14-0-1-1; absent Davis; abstaining Lopez).

Action:Mr. Hytowitz moved, Mr. Harnden seconded, to deny Robin Smith’s request to forgive (satisfy) its judgment against her for costs on appeal in the amount of $16,296.25, and to retain the bar’s full right to pursue the judgment as and when deemed appropriate, and to renew the judgment at the end of its ten year period. The motion was approved by the board (15-0-1; absent Davis).