Professional
Responsibility
Conflicts of Interest
Problem # 1: Roberts Bates inquires as to whether it is proper for an attorney to represent both spouses in an uncontested, "friendly" divorce in which it is alleged "that irreconcilable differences have arisen between the parties" and both parties have been informed that their interests may be adverse and have given consent for the lawyer to represent them both to obtain the divorce?
In Mildred Walden v. Jay M. Hoke & Fredrick G. Staker, III, the West Virginia Supreme Court of Appeals, refers to an opinion, filed by the Committee on Legal Ethics in 1977, in which the Committee "concluded that it is improper for a lawyer to represent both the husband and the wife at any stage of the separation and divorce proceeding, even with full disclosure and informed consent." [Legal Ethics Inquiry 77-7]. The Court goes on to note that "The likelihood of prejudice is so great with dual representation so as to make adequate representation of both spouses impossible, even where the separation is "friendly" and the divorce uncontested. The provisions of W.Va. Code § 48-2-4(a)(10) (1992), which allow a divorce for irreconcilable differences, do not alter the impropriety of dual representation. Legal Ethics Opinion 77-7." Mildred Walden v. Jay M. Hoke & Fredrick G. Staker, III, Supreme Court of Appeals of West Virginia [on-line opinion]
A former employee sues Company X and Supervisor Y in an employment-related matter. Company X wants to pay for Y's defense. Law firm has been representing Company X for several years in its labor and employment matters. Thus, Company X enlists law firm in the representation of both X and Y. Prior to entering into representation of X and Y, law firm consults with Y and discusses the implications of this dual representation. After a similar Discussion with X, both X and Y sign the following agreement:
There are no known or suspected conflicts of interest between X and Y at this time. X, Y and law firm reasonably believe that none will arise. Both X and Y declare that they have revealed to each other all information they are aware of that may indicate a conflict of interest or a potential conflict of interest between them. In this suit, X and Y are generally aligned in interest. The expense of separate representation and unlikelihood of a conflict, indicate that it would be a prudent use of X's resources for law firm to represent both X and Y in this common lawsuit.
It is understood that the remote possibility of a future conflict of interest does exist. Law firm may discover confidential information about either X or Y that may damage X's relationship with Y, thereby causing a conflict of interest. In the event such information is discovered, such information is to be revealed to both X and Y as soon as the conflict is recognized. Both X and Y understand the revelation of such information may result in Y's termination or a cause of action by X against Y. Law firm will not subsequently represent either X or Y in any suit against the other unless and until consent is obtained from both parties. Law firm may continue to represent X in the present litigation even though that representation may adversely affect Y.
In the course of law firm's investigation for the defense of former employee's suit, it discovers that while Y is innocent of the former employee's charge in the suit, he is not a suitable supervisor. Y has committed no criminal or fraudulent acts. X and Y are informed of law firm's discovery, and Y is fired by X. Law firm withdraws from Y's representation and continues to represent only X in the present litigation.
Problem #1A: Robert Bates (see Problem #1), represented both the husband and the wife in a divorce action without complaint from either party or the from the court. Following the divorce, Jack Roberts, the husband in the divorce action moved to Maryland, expanded his business, and has substantially increased the income he is able to derive from the business as compensation as CEO. Rebecca Roberts now seeks to have Robert Bates to modify the divorce decree to increase the child support which her husband is paying? Can Robert Bates continue to represent Rebecca Roberts in this action involving her former husband?
Problem #1B: Anthony Hopkins, in the firm of Bates & Hopkins, has been asked to represent Amma Wilson in what may be a contested divorce. Hopkins has previously represented the woman's husband, Ralph Wilson, in a criminal case and in an uncontested divorce from his first wife, both of these matters being no longer active and having been fully completed. Hopkins knows of no specific information that he may have received from Ralph Wilson that relates to Amma Wilson's divorce case. Can Hopkins represent Amma Wilson in what may be a contested divorce against his former client?
Problem #1C: Hopkins, in still another matter, represented Elizabeth Fearing in a personal injury claim, which was settled before trial. Hopkins has had no contact with Fearing since the settlement. Fearing, now represented by Albert Finos, has filed a complaint for divorce. Fearing's husband, James Fearing has contacted Hopkins requesting that he represent him in the divorce action. Finos has informed Hopkins, by letter, that he does not believe that Hopkins should represent James Fearing because he has previously represented Elizabeth Fearing in the personal injury case. Can Hopkins represent James Fearing under these circumstances?
Problem #2: Robert Bates and Anthony Hopkins practice as the Law Firm of Bates & Hopkins. Bates is retained by Meredith Clausen, who was injured in an accident caused by the negligence of Bill Fitz. When Bates consults with Hopkins about this case, he discovers that Hopkins's mother is the widow of Fitz's paternal grandfather. (The grandfather died approximately four years prior to the accident in question.) Hopkins is not related by blood to Fitz's paternal grandfather and has had no professional relationship with him or anyone else in the family. Can Bates and the Law Firm of Bates and Hopkins represent Meredith Clausen in her action against Bill Fitz?
Problem #3: Can the law firm of Anderson and Ashforth simultaneously represent two different insurance companies and defend them against actions to seek payment pursuant to insurance policies, while in still other cases represent plaintiffs in their actions against still other insurance companies?
Can the law firm of Anderson and Ashforth represent an insurance company in a case involving environmental insurance coverage and in still different law suits represent clients as plaintiffs against still other insurance companies in cases involving coverage, legal cases in which the same legal question(s) concerning interpretation of the insurance contract provisions will arise, and the resolution of which will be of material significance to both insurance companies and to insured parties?
Is the representation of both the insurance company and the insured permissible if Anderson and Ashforth disclose to both the insurance companies and to potential plaintiffs that it represents both the Insurer and the Insureds in law suits involving environmental coverage issues and that in the course of these representations, it may obtain legal rulings adverse to the interests of either the Insurer or the Insureds? This question assumes that the insured clients in one case are not insured by the same insurance company represented in still other cases, that is, insurers and insureds do not have adverse interest in any of the specific lawsuits handled by the law firm.
Problem #4: Over a year ago, Bill Ellison represented Bill "Big Daddy" Boyd on federal drug charges. A plea was negotiated and, as part of that plea agreement, there was a guarantee that no charges would be filed against Boyd by the local prosecuting attorney, Martha Furth. Subsequently, after a falling out with Ellison, Boyd refused to pay the balance of the fees he owed Ellison and he now seeks to retain Furth to represent him in the action filed by Ellison to recover his fees. Can Martha Furth, who was the local prosecutor, now represent Boyd in the action brought by Ellison?
Problem #5: For twelve years, Ron Furman, a duly appointed state public defender, has defended indigent persons in a myriad of state felony, misdemeanor, and juvenile criminal offenses in Preston County, West Virginia. Furman has now been elected district attorney for that judicial district and will be responsible for the prosecution of all persons in felony criminal cases in that district. As the newly elected district attorney, Furman will undoubtedly be called upon to prosecute former clients in new criminal proceedings. He may also be called upon to prosecute former clients in probation revocation cases where he served as defense counsel in the original proceeding.
Is Furman, as the newly elected district attorney, prohibited from prosecuting a motion seeking to revoke the probation of a former client in a case where the lawyer served as defense counsel for the former client in the original proceeding? Is he prohibited from prosecuting all former clients in new criminal proceeding? [Problem is based on Texas Ethics Opinion 538] [See: State of West Virginia ex rel. Charles Garland Keenan v. Honorable John W. Hatcher, Judge of the Circuit Court of Fayette County, and the State of West Virginia (2001) [applying Rule 1.9 (a), West Virginia Rules of Professional Conduct]
Problem #6: Sara Fulton has been asked to represent a company, Froston Inc., in a transaction with another company, Wilson Designs Inc. in which Froston will make a loan to and/or an equity investment in Wilson Designs. The lawyer was formerly general counsel to Fronston Inc., and she and her partners continue to represent Froston. In addition, Fulton has formerly represented Wilson Designs in various matters, and her firm continues to represent Wilson Designs in certain litigation matters.
Sara Fulton wishes to undertake the proposed representation of Fronston while she and other lawyers in her firm represent Wilson Designs in other matters. Fulton has secured an understanding from Wilson Designs that the company has consulted with other legal counsel and has no objection to the proposed representation. Fulton will, during the course of the representation of Fronston be called upon to conduct a "due diligence" examination of Wilson Design's business affairs and records on behalf of Fronston. The lawyer has familiarity with Wilson Designs and its business as a result of his representation of the company. Indeed, one of the reasons both Fronston and Wilson Design are willing to have Sara Fulton represent Fronston is that she can do so more efficiently and less expensively because of her familiarity with Wilson Designs.
Fulton has discussed with Wilson Designs the possible disclosure of confidences and secrets obtained during the course of her representation of the company. She has advised Wilson Designs that if she discloses to Fronston privileged communications, the attorney-client privilege that protects such communications may be waived and she could then be subject to further compelled disclosure of what would have been privileged communications in still other settings, such as litigation another law firm is handling on behalf of Wilson Designs. Wilson Designs has indicated that it is not willing to consent to disclosures that might waive the attorney-client privilege, but is prepared to consent to the lawyer's use of that information on behalf of Fulton's representation in the Fronston matter which will directly and materially benefit Wilson Designs.
Can Fulton proceed with the representation with the limited consent given by Wilson Design?
Problem #7: Approximately three years ago, Anderson Law Firm represented ABC Software regarding a problem ABC was having with a software program it had purchased. At that time, ABC hired Ironson Computer Design to write a new software package. As counsel for ABC, the law firm drafted a contract between ABC and Ironson Computer Design ("the contract"). Thereafter, Ironson Computer Design retained Anderson Law Firm as its counsel with full knowledge that Anderson could not represent Ironson Computer Design in any matters relating to its contract with ABC. Anderson Law Firm continues to represent ABC in other matters.
As an initial inquiry, should Anderson Law Firm have taken on Ironson Computer Design as a new client, with knowledge that at some future date a conflict might arise between ABC Software and Ironson Computer Design?
Lawrence Filbert, the Partner at Anderson Law Firm, who has dealt primarily with ABC Software and the contract with Ironson Computer Design receives a telephone call from the president of ABC with respect to another matter. During that call, ABC's president notes that ABC has been displeased with Ironson's performance of the contract and, aware that Anderson also represents Ironson, reports that ABC has hired another attorney to investigate a potential lawsuit against Ironson.
Filbert conveys to the president of ABC his understanding that he was not being retained as ABC's counsel in the matter because of his firm's current representation of Ironson and that he might eventually be a fact witness in the dispute between ABC and Ironson in their dispute over the contract, which he had drafted. Can Filbert now disclose to Ironson ABC's unhappiness with its performance and the potential for litigation?
Problem #8: Larry and Ellen are married. Both are lawyers, members of different law firms. Larry and Ellen's firm represent plaintiff and defendant in a law suit. Do the law firms (and Larry and Ellen) have a conflict of interest? If so, how should they go about resolving it?
Conflicts
Conflicts
of Interest: A Lawyer's Short Introduction
Daniel P. Bestul Duxstad, Vale &, Bestul S.C., Wisconsin
