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                                             94 N.J.L.J. 454
                                             May 27, 1971

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the New Jersey Supreme Court


OPINION 209

Conflict of Interest - Representing Broker
While Former Client Buyer May Be Impleaded

    The following inquiry has been received by this Committee. The inquirer was engaged by the buyer to review and advise on his behalf a proposed contract for the purchase of a business from the seller. The inquirer undertook the task of reviewing the contract at one conference with the seller's attorney. The inquirer then left for Europe and recommended that the buyer be represented at the closing by another attorney of the inquirer's selection. The transaction was completed during the inquirer's absence. The inquirer has conferred with the substituted counsel for his client and has expended his efforts in an attempt to have his client pay the bill of the substituted attorney.
    The inquirer has now been contacted by New York counsel to represent the broker in the transaction for unpaid commissions and institute suit against the seller. The inquirer has discussed the matter with the seller's attorney with whom he discussed the original transaction in its initial phase. The seller's attorney has informed the inquirer that in the event suit is started for brokerage commissions, the seller intends to implead the inquirer's original client buyer on the grounds that he had agreed to pay the brokerage commissions.

    The question posed is whether the inquirer may represent the broker. The inquirer stresses the fact that he has been obliged to dun his buyer for the payment of the bill rendered by his substituted counsel and has indicated that suit may be instituted against the buyer for the unpaid fees.
    It is the option of this Committee that the inquirer's representation of the broker in a suit against the seller in which his original client buyer will be impleaded is improper. The question of the payment of fees is immaterial to the basic issue. It is obvious from the inquiry that the inquirer's client in the initial instance was the buyer, that the details of the transaction
were discussed and negotiated between the inquirer and the attorneys for the seller, that as a result of the transaction, there is a dispute as to who is liable for the commissions. It would be improper for the inquirer to take a position representing the broker which may be adverse to his former client arising out of the same transaction. See Canons of Professional Ethics, Canon 6 and N.J. Advisory Committee on Professional Ethics, Opinions 6, 86 N.J.L.J. 718 (1963); 26, 87 N.J.L.J. 19 (1964); 42, 87 N.J.L.J. 285 (1964); 43, 87 N.J.L.J. 285 (1964); 57, 87 N.J.L.J. 737 (1964); 86, 88 N.J.L.J. 773 (1965); 128, 91 N.J.L.J. 309 (1968); 153, 92 N.J.L.J. 338 (1969) and 155, 92 N.J.L.J. 358 (1969).

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