99 N.J.L.J. 1129
December 23, 1976
Conflict of Interest
The inquirer was consulted by a woman whose husband died
without a will. During the consultation, it was learned that the
woman had been injured in an accident while she was a passenger in
a car driven by her late husband.
The inquirer's firm attended to the administration of the estate, with the woman's brother-in-law appointed as administrator, and "the estate was wound up." The question presented is whether the inquirer's firm can institute suit against the estate of the late husband with the administrator as the nominal defendant. We are informed that there is available insurance coverage.
The Committee finds it extremely difficult to furnish definitive answers in cases where the inquiry leaves open to speculation so many alternate possibilities as to future events. Of course, this is often the very circumstance which prompts the inquiry and perhaps provides the answer.
On the surface it appears that the inquirer recently served as counsel to the fiduciary and now proposes to bring suit against him in his representative capacity. However assuming the existence of applicable insurance coverage with adequate limits and further assuming that there is no real likelihood of a dispute as to coverage because of claimed breach of policy conditions or the like, the "conflict of interest" may be more apparent than real. However, should the carrier, for example, assert late notice of accident as a basis for avoiding coverage, the inquirer might become a witness in a declaratory judgment case, raising the issue of DR 5-101.
As a practical matter, we assume that the inquirer would confer with the administrator to explain to him the nature of the proceeding and to advise him to forward all suit papers to the carrier. If there is a possibility that any judgment might exceed the limits of the insurance policy, the imitator may well require legal advice as to how to deal with the carrier, unless, of course, the only beneficiary of the estate is the plaintiff's wife.
We cannot know whether any of the myriad of possible problems will actually arise and of course lawyers constantly must concern themselves with the potential for future real conflicts. If the inquirer satisfies himself that there is no real possibility of such potential conflict, making allowance for the duty to withdraw should he become a witness (DR. 5-102), he is not precluded from accepting employment. It may be that the administrator, under these special circumstances, is not "one of adverse interests" within the meaning of DR 7-104.
On balance, however, we suggest that the very sensibilities which motivate the inquiry ought to lead the lawyer to the conclusion that he would be more comfortable if he referred the matter to another attorney. Since we are unable to assess with any degree of certainty the course of future events, we are unwilling to hold that the lawyer may accept the employment with propriety.