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117 N.J.L.J. 244
February 27, 1986
ADVISORY COMMITTEE ON PROFESSIONAL ETHICS
Appointed by the Supreme Court of New Jersey
OPINION 579
Conflict of Interest -
Representation of Client and Clients's
Partner in Purchase of House, and of
Client in Subsequent Partition
This Committee has been asked whether it is ethically proper
for an attorney to represent Client A in an action for partition of
property owned jointly by A and B and in an action to dissolve a
partnership between A and B where the inquirer previously
represented A and B in a joint purchase of the property. Although
the inquirer did not prepare any of the papers in connection with
that purchase, she did attend the closing as the attorney for both
of them. Subsequently, the inquirer reviewed a lease for the A and
B partnership with respect to rental of a craft booth at a mall and
gave them legal advice concerning the terms and conditions of the
lease. The inquirer has performed no legal services for either A or
B since 1981.
The present inquiry is governed by RPC l.9(a) which provides:
"a lawyer who has represented a client in a matter shall not
thereafter:
(1) represent another client in the same or a
substantially related matter in which the
client's interest are materially adverse to
the interests of the former client unless the
former client consents after a full disclosure
of the circumstances and consultation with the
former client; or
(2) use information relating to the representation
to the disadvantage to the former client
except as RPC 1.6 would permit with respect to
a client or when the information has become
generally known."
RPC l.9(b) incorporates by reference the provisions of RPC
1.7(c) which states that the rule does not alter the effect of
existing case law or ethics opinions with respect to the appearance
of impropriety.
While the inquirer represents that in her prior representation
of A and B she obtained no information concerning the finances of
either individual or the partnership, she did represent both
parties at the closing on the purchase of the property and,
therefore, would have reviewed all of the relevant financial
documents and, most likely, have retained copies in her file on
those clients. The inquirer's representation of former client A in
a partition action, with respect to the property, would be a matter
substantially related to the earlier acquisition in which she
represented both A and B and, therefore, under the requirements of
RPC 1.9(a)(1) the inquirer would, at a minimum, be required to
fully disclose to former client B the request that the inquirer
represent former client A and obtain former client B's consent.
There are numerous ethics opinions, which, although not
dealing with the specific set of facts presented by the inquirer,
are sufficiently analogous and support the conclusion of the
Committee. Opinion 205, 94 N.J.L.J. 451 (1971) dealt with whether
an attorney may represent a client in an action against a former
partner of the client when the attorney had previously represented
a corporation wherein both men were principals in the corporation.
The Committee concluded under the facts presented in that inquiry
that there was a very definite possibility of a conflict of
interest. The Committee quoted from In re Blatt, 42 N.J. 522, 524
(1964), the following: "There is always a possibility, however
remote, that confidential information received from the original
client may be used to his detriment."
The Committee then said:
We have stated many times that if there is the
slightest doubt as to whether a proposed representation
involves such a conflict of interest, or may encompass
the use of special knowledge or information obtained
through service of another client, or necessitates a
possible conflict between the interests of a present or
former client and those of the attorney, the doubt must
be resolved by the attorney taking a definite stand that
he cannot serve two masters. Opinion 205, supra.
The inquirer cites, for the benefit of the Committee, language
from Opinion 154, 92 N.J.L.J. 353 (1969). In that Opinion, the
inquiry was presented as to whether an attorney could properly
undertake a negligence action against an individual whom the
attorney had formerly represented in an unrelated municipal court
case. The Committee assumed for purposes of rendering the Opinion
that the municipal court matter had been dismissed and that the
parties and circumstances involved in the municipal court matter
were entirely different from those which gave rise to the
negligence matter. It is clear that Opinion 154, supra, is
distinguishable from the facts presented by the inquirer since in
the case presently before the Committee, the parties and to a large
extent the circumstances involved in the present action are the
same as those for which both parties were initially represented by
the inquirer.
While the Committee assumes, as represented by the inquirer,
that the inquirer never received any confidential information about
the personal finances of former client B nor about the finances of
the partnership, there is, at a minimum, an appearance of
impropriety and, without complete disclosure to former client B and
B's approval of the inquirer's representation of former client A,
such representation should not be undertaken.
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