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96 N.J.L.J. 221
February 22, 1973
ADVISORY COMMITTEE ON PROFESSIONAL ETHICS
Appointed by the New Jersey Supreme Court
OPINION 249
Conflict of Interest
Trustee of Wife's Funds
Representing Adverse Husband
The following inquiry has been presented:
May a law firm, which previously
represented a husband in a workmen's
compensation accident action, and subsequently
represented him in a products liability action
with the wife suing per quod, subsequently
represent the husband in a matrimonial action
between the wife and husband?
Matrimonial problems have arisen between the husband and wife,
and the wife now has her own independent counsel. The inquirer
proposes to represent the husband in defense of a claim for
separate maintenance and support, which is anticipated on the part
of the wife. No confidences or confidential information were
obtained from the wife concerning her independent assets or
anything relating to the matrimonial action in the prior products
liability case.
We quote further from the inquiry:
The wife, however, has sought to obtain a
substantial portion of the settlement of the
products liability case alleging that a
substantial portion of the settlement should
go to pay for her per quod claim. The funds
of the settlement after the workmen's
compensation lien and attorney's fees were
taken out are presently being held in a
trustee account of this law firm. The
independent counsel for the wife has agreed to
this arrangement subject to any final
settlement or separation agreement. (Emphasis
added).
The inquirer cites our Opinion 216, 94 N.J.L.J. 677 (1971), to
support his contention that there is no conflict of interest in the
facts which he now presents, which will prevent his representing
the husband in the matrimonial action. With this, we disagree.
The inquirer states that this firm is holding "in trust" the
funds of the settlement of the products liability case. He, or his
firm, therefore, is a trustee of these funds, not just for the
husband, but also for the wife. It is stated that the wife now
seeks to obtain a substantial portion of these funds for her per
quod claim. The inquirer, if he represents the husband, must resist
the wife's claim. There is, therefore, a direct conflict of
interest.
In our Opinion 216, supra, we reviewed in detail the Canons of
Professional Ethics applicable at that time and cited several
opinions, previously given by this committee. In that opinion, an
attorney had previously represented a husband and wife in the
purchase of a house. Sometime later he was asked to represent the
wife in a divorce proceeding against her husband. Obviously, there
had been no connection between the prior representation and the new
matter. In the inquiry before us, however, the attorney must take
an adverse position to that of the wife. We repeat a quote from our
Opinion 216:
A lawyer should not continue employment
when he discovers that this obligation
prevents the performance of his full duty to a
former or to his new client.
We have held that an attorney could properly handle an action
against an individual whom the attorney had formerly represented in
an unrelated matter. Opinion 154, 92 N.J.L.J. 353 (1969). In the
facts presented here, the husband and wife were the clients of the
inquirer. He is a trustee of funds which belong to both. Those
funds are now related to the contemplated matrimonial action and
the parties are the same.
It is our opinion that there is a definite conflict of
interest presented on the facts submitted here and that the
attorney cannot represent the husband in the contemplated action by
the wife.
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