MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2005-13
Whether conflict of interest exists where existing litigation client testifies against another client in different case.
You advise that you are a civil litigator in Western Maryland and your practice is almost exclusively insurance defense cases. Insurance Company A (“Company A”) assigns cases to your firm on a regular basis. Approximately eighteen months ago, Company A assigned to you the defense of a policyholder and his minor son, who was the operator of his father’s vehicle (Case 1). After an investigation, you determined that the son was at fault in the accident. Thereafter, you entered into a stipulation with Plaintiff’s counsel, under which liability was admitted on behalf of the operator and the father was dismissed from Case 1. You and Plaintiff’s counsel agreed to proceed to trial on the issue of damages.
When Case 1 proceeded to trial, you learned for the first time that the female Plaintiff was now married to another insurance defense client of yours in a separate case. In the latter case (Case 2), you represent Mr. X, who owns a moving company, and Mr. X’s employee, who was driving a company-owned vehicle. Mr. X was in court for the trial of Case 1 to testify on behalf of his new wife with respect to her permanent injury claim. You notified the Court of this unexpected development. The trial judge examined Mr. X concerning your representation of him. The Court asked Mr. X whether he had any problem with your representation of his wife in Case 2 while defending the driver in Case 1, his wife’s case. He indicated that he did not have a problem. Notwithstanding Mr. X’s testimony, the Court advised you that “if she were me, she would not be comfortable trying the case.” However, Case 1 was postponed because you were unable to contact your operator client to seek a waiver of the possible conflict.
You have asked the following:
1. Do I have a conflict in Case 1 and, if so, can it be waived by obtaining the consent of the operator in Case 1 and the insured in Case 2?
2. If there is a conflict, could a “Chinese wall” be set up so a partner in your three-person firm could try Case 1?
3. If there is a conflict, would it be permissible for you to continue to represent Mr. X in Case 2?
The Committee needs only to address Question 1, because it is apparent that you have not correctly described the nature of your representation. You represent, in each case, both the insurer and the insured. As this Committee stated in Ethics Docket 91-18: “an insured and an insurance company providing the representation for the insured may both be clients, of an attorney in the same matter. See for example, Brohawn v. Transamerica Insurance Company, 278 Md. 396, 347 A.2d 842 (1975).” See also, Ethics Docket 2000-46. That dual representation of the insured and insurer is precisely the situation you have in Case 1 and in Case 2.
Your inquiry does not indicate any intention to seek the consent of your insurer client in the two matters. Pursuant to Rule 1.7 (b)(4), each affected client must give “informed consent, confirmed in writing.” Therefore, Rule 1.7 would require both the insureds’ and insurance company’s consent before you could continue to represent your clients in the two cases.
Opinions of the Committee may be obtained from the Committee’s website: www.msba.org.
We trust the foregoing is responsive to your inquiry.