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                                             94 N.J.L.J. 461
                                            June 3, 1971


Appointed by the New Jersey Supreme Court


Conflict of Interest - Former Attorney
for Engineer Representing Railroad Employer

    Inquiry has been made whether a firm of attorneys should withdraw from its representation of a railroad, now in reorganization, after withdrawing as attorney for the engineer employed by the railroad. A suit has been instituted against the railroad and its engineer who was operating the engine at the time of an accident. The railroad is now in reorganization and has insurance coverage with a deductible provision of $25,000 or $50,000. If a judgment is recovered against both the railroad and its engineer, and if the trustee in reorganization cannot pay the deductible amount, plaintiff could collect his judgment from the engineer. His personal assets and his life savings would be subject to attachment and the chance of reimbursement from the defunct railroad would be slight.
    Prior to reorganization, the inquirer firm filed an answer on behalf of the railroad and its employee. It conferred with and counseled the engineer, and represented him at the taking of depositions, and was privy to its observations concerning the accident. It is its belief that it obtained no more information from him than could have been obtained by depositions or interrogatories.

    The inquirer firm has advised the engineer of the conflicting facts, advised him that he is subject to a judgment, and had undertaken to secure other counsel to represent him, since it was its opinion that he should have independent representation.
    The question arises whether, since the inquirer firm represented the engineer and filed an answer in his behalf, there would be any conflict of interest in its continuing to represent the railroad. The factual situation is somewhat analogous to that described in our Opinion 156, 92 N.J.L.J. 481 (1969), wherein we held that an attorney could not represent both the driver and a passenger in an automobile accident case because of the inherent conflict of interest.
    If the engineer urged that the accident was the result of defective equipment or its improper maintenance, a conflict would arise between the railroad and its engineer. If a judgment were rendered against both the engineer and the railroad on this theory, the engineer could assert a claim against the defunct railroad for indemnification under the common law. Conversely, a railroad might seek indemnification from the engineer if the primary and proximate cause of the accident resulted from the engineer's operation of the train. Because of the financial status of the railroad, the life savings of the employee engineer could be in jeopardy.
    The potentially adverse interest of the railroad and its engineer would make it advisable for the inquirer firm to withdraw from its representation of the railroad in the pending action.

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