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                                         96 N.J.L.J. 221
                                        February 22, 1973


Appointed by the New Jersey Supreme Court


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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