101 N.J.L.J. 209
March 9, 1978
Conflict of Interest
Foreclosure Against Former Client
The problem posed by this inquiry is one with which we have dealt heretofore, i.e., an attorney suing a client whom he has previously represented. The attorney says that he has been retained by a lending institution to foreclose a mortgage against a former client of mine." He states that he represented the client in purchasing the property in question while he was a review attorney for the lending institutions. He had never previously represented the client nor has he had any subsequent relationship with him. The attorney is now asked by the lending institution to foreclose the mortgage. The inquirer cites this Committee's Opinion 94, 89 N.J.L.J. 333 (1966), but thinks it does not apply here. There, we said that it would be improper for the attorney to foreclose a mortgage against a former client. In that case, there had been representation by the attorney of the client on several occasions. There we discussed at length, citing other opinions, that to foreclose against a former client under such circumstances would tend to impair the confidence which a client has a right to repose in his attorney and would thus tend to destroy one of the essentials of the professional relationship.
The inquirer relies upon the case of Hansen v. Janitschek, 57 N.J. Super. 418 (App Div. 1959), reversed 31 N.J. 545 (1960). In reversing, the Supreme Court adopted the dissenting opinion of Judge Conford in the Appellate Division. We cited and considered Janitschek in Opinion 94, supra. However, a careful reading of Judge Conford's opinion reveals that he came to the conclusion that no attorney-client relationship existed between the plaintiff and the lawyer involved and he said, at page 43l: "It does not appear that he had ever previously represented or acted as legal advisor to Mr. or Mrs. Hansen in any capacity whatever." He repeated, at page 433, that there was no basis for inference in the proofs that the plaintiff and the attorney contemplated any rendition by the latter of legal services to the former. Here the inquirer states specifically that the proposed defendant was "a former client of mine" and in several places in the inquiry he refers to the mortgagor as a "client." Obviously, he considered that an attorney- client relationship existed.
For recent decisions discussing the disqualification of attorneys to sue former clients, see Akerly v. Red Barn System, Inc., 551 F. 2d 539, 544 (3 Cir. 1977), and Fund of Funds v. Arthur Anderson & Co., F. 2d (2 Cir. 1977). Cf., 64 Yale L.J. 917, 928 (1955), "Disqualification of Attorneys for Representing Interests Adverse to Former Clients. In the Fund of Funds case, the court prefaced its opinion with the statement, "[w]hen dealing with ethical principles . . . we cannot paint with broad strokes. The lines are fine and must be so marked [citing several cases]."
Under the circumstances, it would be clearly improper for the attorney to represent the lending institution in the foreclosure action against his former client.