MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2000-01
Conflict of Interest when Attorney/Client Relationship Arises
Lawyer represents tenant ("T") of landlord ("L"). T sustained losses due to fire destruction of L's building. During initial fact gathering and interviews with lawyer's client T, that client requested lawyer evaluate, on L's behalf, a cause of action that L might have against utility ("U"). U's switch box and wiring may have been the cause of the fire. L's insurer, ("I"), had already prosecuted a federal suit against U for L's fire loss although L was not listed as a party plaintiff. That case was settled and a stipulation of dismissal with prejudice was filed.
Lawyer's opinion letter to L letter shows lawyer "carefully studied the appraisals and other information" provided by L at a one time meeting with one of the partners of L. Lawyer's letter opined to L that a further suit of L against U had merit, and a contingency fee agreement was attached inviting L to hire lawyer in it suit against U.
L did not sign the fee agreement and lawyer continued preparing and filing suit on behalf of T against L. L, through his present counsel wants lawyer to remove himself as T's attorney. L claims lawyer's meeting with him and lawyer's opinion regarding L's prospects of litigation against U have created a conflict that does not permit lawyer to continue as T's litigator in T's suit against L.
This Committee typically does not provide formal opinions on matters in litigation in the recognition that one or another side in litigation may seek to use this Committee's opinion to advance it cause. In addition, this Committee does not want to impinge upon the function of the Court system to direct proceedings under its control. However, in this instance, the Committee is prepared to respond to your inquiries because you have asked the Committee to assist you in evaluating whether you can continue in the representation of a client in litigation. We believe that our Opinion can be helpful to you in regard.
Resolving questions of conflict of interest is primarily the responsibility of the lawyer undertaking representation; so conflict charged by an opposing party should be viewed with caution because this objection can be used as a technique of harassment. Comment, Rule 1.7.
The beginning point of analysis here should be the professional relationship of lawyer to both T and L. Clearly, there exists a client-lawyer relationship between T and lawyer at all pertinent times. Although L did not retain lawyer in its action against U,lawyer did perform professional legal service for L by rendering his legal opinion on U's liability to L. And although the legal perspectives on T and L are not identical, those parties are sufficiently closely related to the predicate incident of the fire so that U might end up a third party defendant to T's suit against L, or, a suit by T against L and L's suit against U would likely be consolidated.
Scope of the Rules of Professional Conduct states:
"Most of the duties flowing from the client-lawyer relationship attach onlyafter the client ahs requested the lawyer to render legal services and the lawyerhas agreed to do so."
Rule 1.7, in pertinent part, states:
"(a) A lawyer shall not represent a client if the representation of that clientwill be directly adverse so another client, unless:
- the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
- each client consents after consultation …
(c) The consultation required by paragraphs (a) and (b) shall include explanation of the implications of the common representations and my limitations resulting from the lawyer's responsibilities to another, or from the lawyer's own interests, as well as the advantages and risks involved." (Emphasis added)
The facts related do not indicate the lawyer consulted with either T or L regarding simultaneous representation of clients with opposing interests arising out of the same occurrence. This Committee therefore, will assume that the lawyer did not consult with both clients regarding simultaneous representation and did not obtain the consent of both clients to such representation. Assuming that to be the case, this Committee is of the view that the continued representation of T under the circumstances you have described is not in compliance with Rule 1.7(a).
Additionally, the facts presented clearly shows L to be a likely defendant of any action the lawyer may bring o T's behalf. The lawyer obviously thought L to beun-represented because the lawyer offered his professional services to L to sue U. Part of the Comment to Rule 4.3 states:
"During the course of a lawyer's representation of a client, the lawyer should not give advice to anun-represented person other than advise to obtain counsel."
Despite the attached opinion letter by lawyer to L wherein the lawyer states he "studied the appraisals and other information that you provided me", lawyer states none of it was confidential and that all necessary information was publicly known being contained in the federal suit by I, L's insurer, against U. While lawyer's position appears to be that if no confidential information is obtained and lawyer is not hired for continuing representation, no impermissible conflict exists.
This Committee does not agree with that analysis. Whether T's motivation in "lending" his lawyer to L was innocently helpful or a plan to enter the camp of his landlord by means of a "Trojan horse", it is the Committee's view that the lawyer could not reasonably discount the fact that T and L, having adversarial interest, mighteventually end up at opposite tables. In summary, it is not the issue of obtaining confidential information, but rather simultaneous representation of clients with directly adverse positions that constitutes an impermissible conflict, particularly where the required consultation was not given and one client objects to continued representation of the other client. The Committee believes the Rules require lawyer's withdrawal from further representation of either party in this matter.