Professional
Responsibility
Conflicts of Interest
Expanded Version of the Problems Presented for Class Discussion
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? [See Representing Both Spouses in Divorce Cases, Legal Ethics Inquiry 77-7, West Virginia State Bar (an opinion decided under the Code of Professional Responsibility, the body of ethical rules which preceded the Rules of Professional Conduct now in effect)]
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."
In line with this arrangement, and in order to operate efficiently and cost effectively, the corporation would like to make its in-house lawyers available, from time to time, to provide legal services to these joint ventures. Similarly, the other joint venturers may desire to make their in-house lawyers available, from time to time, to provide legal services to the joint venture. It may be that one party makes available to the joint venture one type of legal service (e.g., labor) and the other party makes available another type of legal service (e.g., corporate). These legal services would relate to the ongoing business activities of the joint venture. Under one arrangement, no charge would be made by the corporation to the joint venture for the legal services provided by its in-house lawyers, but under an alternative arrangement, the corporation may be reimbursed by the joint venture for the costs of providing the lawyer, based on the proportion of time each in-house counsel spends on joint venture matters." [Texas Opinion 512 (1995)]
See generally: Multiple Representations/Conflicts of Interest
Handbook, Antitrust Division, Department of JusticeInsurance Cases:
Problem #2: Jack Miles charges a flat fee of $250.00 for an initial consultation in a divorce case. The purposes of the initial consultation are to acquaint the potential client with West Virginia divorce law, the attorney's family law practice, and Miles himself. If both the attorney and the potential client agree to the representation, the attorney becomes that client's legal counsel.
Linda Anderson consults with Miles in April, 2003 to obtain legal representation in her pending divorce case against her husband Bill Anderson. When Bill Anderson learned that his wife had retained Jack Miles as her attorney, he told his present attorney, Donald Gilmore, that he had considered a divorce from his wife Linda, in 1995 and had consulted with Jack Miles (as well as some other lawyers) about the divorce. He says he distinctly remembers paying Miles a consultation fee even though he did not go ahead with the divorce at that time.
When Gilmore contacts Miles and requests that he withdraw from the representation of Linda Anderson based on a conflict of interest, Miles informs Gilmore that he has checked his own records and learned that the consultation with Bill Anderson occurred and that he received payment in the amount of $250. However, Miles argues that he has no obligation to remove himself from the case, and to withdraw from representation of Linda Anderson because he has no independent recollection and no memory of the consultation, and that Bill Anderson gave him no facts or information with respect to the marital or domestic situation that could be used in a detrimental way against him in the present divorce. (Indeed, no file for Anderson was ever opened as Miles had not agreed to represent him in the divorce action.) Moreover, Jack Miles notes that after the consultation--which he does not remember--Bill Anderson did not retain him and thus no attorney-client relationship was established.
Does Jack Miles have a conflict of interest which requires him to withdraw from his representation of Linda Anderson? [Based on Texas Opinion 494 (1994)] [See also: Conflicts and the Prospective Client, Office of Bar Counsel, Massachusetts]
Problem #2A: "Phyliss Powell consults with Finnis Olson, at Olson, Wilson, and Smith with regard to a divorce, but does not actually hire Olson to represent her when she later files for divorce. Powell does, however, pay a $400 fee to Olson for his services. Clarence Andrew was a partner at Olson, Wilson, and Smith when Olson consulted with Phyliss Powell, but did not have any dealings with the case or discussions with Olson about it. He obtained no confidential information regarding Powell while employed a partner at Olson, Wilson, and Smith.
Clarence Andrew has now started his own firm. Now, some 18 months after Phyliss Powell's consultation with Olson at Olson, Wilson, and Smith, Dale Powell, the husband has now hired Andrew to represent him in the divorce action. Phyliss Powell, recognizing Andrew from his days at Olson, Wilson, and Smith, seeks, through her attorney, to have Andrew barred from representing her husband as a conflict of interest. When informed of his wife's request, Dale Powell informs Andrew that he does not wish for him to withdraw from the representation. What should Clarence Andrew do? [Based on Texas Opinion 501 (1994)]
Problem #2B: 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? [See: Vermont Bar Association Advisory Ethics Opinion 87-14]
Problem #2C: 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? See: [Vermont Bar Association Advisory Ethics Opinion 95-13]
Problem #3: A lawyer "conclude[s] a law suit in which he represented the widow of a decedent who was killed in an airplane collision. In that action, suit was brought against the pilots of both planes and a corporation which owned both planes. The firm settled the case against the corporation and obtained a jury verdict against the pilot of plane "A." The pilot of plane "B" apparently was found not guilty. The firm has now been asked to represent the pilot of plane "B" in an action against the pilot of plane "A" and the owner of the planes." [Florida Bar Opinion 62-9]
Problem #4: Can a law firm represent a defendant accused of shooting and killing another of the firm’s clients? [State of New Jersey in the Interest of S.G. (Sup.Ct. N.J., 2003)]
Problem #5: 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. [Representation Against Former Client, Ethics Opinion, Mississippi State Bar]
See generally: [John Dzienkowski, Taking Positional Conflicts of Interest Seriously, 9 Business and Professional Ethics Journal 109 (Spring-Summer, 1990) John S. Dzienkowski, Positional Conflicts of Interest, 71 Tex. L. Rev. 457 (1993)]
Problem #5A: "Our firm has been associated by another law firm to represent a corporation in a case involving breach of contract. We have been engaged in this representation for approximately one (1) year. Recently, an individual requested that our firm represent him in a personal injury action against the said corporation for which we are presently engaged in the breach of contract case. None of the facts in the respective cases have any similarity to which our firm would be privy in the breach of contract case which could be helpful in the negligence case." [Mississippi State Bar Opinion No. 103]
Problem #5B: "Assume that a lawyer represents Mr. Lessor, who owns an apartment building. The lawyer has drafted a form lease for Lessor and represent him whenever litigation arises between Lessor and his lessees.
The lawyer receives a call from Mr. Tenant, who is not a lessee in the client's building but who wants to sue his own landloard because of alleged negligence in the maintenance of the building in which Tenant lives. Tenant's lease contains a clause, similar to one that the lawyer had drafted for Lessor's form lease, exculpating the landlord from liability for negligence. In order to prevail in the litigation, therefore, the lawyer would have to argue that the clause in the Tenant's lease--similar to the one drafted by the lawyer for Lessor--is voidable on grounds of unconscionability or public policy." [Monroe H. Freedman & Abbe Smith, Understanding Lawyers' Ethics 264 (Newark, New Jersey: LexisNexis, 2nd ed. 2002)]
Problem #6: 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 represented the U.S. Attorney's office in the federal drug case in the criminal action agains Boyd, not represent Boyd in the action brought by Ellison? [Florida Bar Opinion 72-41]
Problem #7: 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? [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] [State ex rel. McClanahan v. Hamilton, 452 W.Va. 404 (1994)]
Problem #8: "An attorney has settled a claim arising from a product liability claim pursued on behalf of plaintiff against five separate corporations. During the litigation, an extensive deposition of the plaintiff was taken by the corporate defendants. In the underlying action there was no joint defense arrangement. The four corporations have interests distinctly adverse one to the other.
As a result of the representation by the Attorney, the plaintiff was paid a substantial sum by four of the five corporations, who entered into a "settlement agreement" with plaintiff. As a result, the four corporations agreed to contribute proceeds to fund the settlement with the plaintiff to resolve the plaintiff's claims against the four corporations. The claim against the fifth corporation was dismissed without prejudice for lack of in personam jurisdiction. Plaintiff is no longer pursuing any claim against the fifth corporation for reasons unrelated to the questions presented herein.
After the entry of the settlement agreement, the four corporations entered into an 'arbitration agreement' whereby an independent arbitrator would discern the final monetary obligation of each of the four corporations for their respective portion of the settlement paid to the plaintiff by determination of the degree of fault to be allocated to each corporation. The Plaintiff was not a party to the 'arbitration agreement.' Thereafter, one of the four corporations asked Attorney to represent it in the arbitration to determine the degree of fault by and between the said corporate entities. Prior to acceptance of this representation, Attorney obtained an informed waiver or consent from both the Plaintiff and the Corporation in the arbitration proceedings. The remaining corporations, however, objected to said representation and have indicated their intent to call the plaintiff and Attorney as a witness in the arbitration proceedings." [Mississippi Bar Opinion No. 242]
Problem #9: 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 consult 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 might be deemed waived and she might then be subject to further compelled disclosure of such communications in other settings, such as other litigation that 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? [See: A lawyer represents a company involved in a business transaction with a second company also represented by the same lawyer, Boston Bar Association Ethics Opinion]
Problem #10: 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 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. [Delaware State Bar Association Committee on Professional Ethics Opinion 1990-1]
Problem #10: 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? [Mississippi State Bar Ethics Opinion 112]
Conflicts
Freivogel on Conflicts
Joint
Defense and Shared Counsel Arrangements
Commentary by David Hricik
