92 N.J.L.J. 641
October 2, 1969
Conflict of Interest
Suing Former Client
Inquiry has been made as to whether there is a conflict of
interest on the part of the law firm here involved and, if so,
what, if anything, should be done about it. There is now pending an
action started by the inquirer as attorney for the plaintiff
corporation against a former employee for monies loaned him by the
corporation during the period of his employment, the employee
having voluntarily quit last January and having immediately been
employed by a competitor of plaintiff. The defendant in the action
is represented by law firm, F, which filed an answer and
counterclaim. The principal and majority stockholders of the
plaintiff corporation are D.B. and his wife, J.B. In 1964 law firm
F were the attorneys for them and their three children in a
successful change of name proceedings. At that time D.B. was in the
employ of the present employer of the defendant, which employer,
through its New York attorney, referred Mr. and Mrs. B. to the
present defendant's attorneys, F.
The applicant states that he believes that the situation involves Canons of Professional Ethics, Canon 6, concerning conflict (or possibility of conflict) of interests and he states further that the only opinion this Committee has ever published on this subject is our Opinion 6, 86 N.J.L.J. 718 (1963).
It is true that Canon 6 states that it is unprofessional for a lawyer to represent conflicting interests and the obligation to represent his client with undivided fidelity is ever present and the lawyer is not to divulge his secrets or confidences. It also forbids the lawyer to accept retainers or employment from others in matters adversely affected by any interests of the client with respect to which confidence has been reposed.
In our Opinion 6 we indicated that it would be unprofessional and improper for the attorney there involved to become involved in an action against his former client and we stated that to do otherwise would require the attorney to assert an interpretation of or a claim under an agreement which he had previously approved and, accordingly, the attorney should not attempt to nullify his own work.
We stated then, and we repeat here, that irrespective of any actual detriment that the client might suffer, he might naturally feel that he had in some way been wronged when confronted by an action against him by the same attorney whom he had previously employed, and we definitely feel that to maintain public confidence in the bar, it is necessary not only to avoid actual wrongdoing but even the appearance of wrongdoing.
The impropriety of taking a case against a former client is not based solely on necessity for disclosure of confidential communication. If the former client has any reason to feel aggrieved, the necessity of maintaining proper public relations for the bar and of avoiding the appearance of wrongdoing should cause the attorney to refuse to accept employment in a capacity which is adverse to the interests of the former client.
The mere fact that under a prior retainer the attorney has advocated views of the law and facts different from those on which his present client rests his case will not ipso facto disqualify him. See Drinker, Legal Ethics 114 (1953). It is only when there is no conflict of interests that Canon 6 does not apply, as where two matters are wholly unrelated. See A.B.A. Comm. on Professional Ethics and Grievances, Opinions 71, 72 (1932) and 262 (1944).
In the inquiry now before us, however, a different situation has presented itself. In 1964 the law firm involved were the attorneys for the applicant and their three children in a successful change of name proceeding and nothing else. The present action involves a question of monies loaned during a period of employment which is entirely different and could under no circumstances present any breach of confidences which were previously given to the attorneys when they handled a routine change of name proceeding and there appeared to be no secrets and confidences disclosed to the attorneys which could in any way be involved in the present controversy or which had any relation to the prior engagement. We see no conflict of interests on the part of the law firm mentioned based upon the facts as they are presented in this inquiry.