114 N.J.L.J. 628
December 13, 1984
Division of Fees for Legal Services Where
the Referring Attorney Represented as a
Plaintiff in a Consolidated matter, a Party
who was also a Defendant in the Referred Case
The inquirer, a civil trial attorney, asks whether it is a
conflict of interest to divide a fee for legal services pursuant to
DR 2-107 (now RPC 1.5) when the referring attorney represented as
a party in a consolidated matter, a plaintiff who was also a
defendant in the referred case.
The Rules of Professional Conduct 1.5(e) provide circumstances when it is permissible for attorneys to share a fee. These include when the fee is divided by proportion to services rendered or by agreement, when the client consents to the sharing of fees, and the total fee which is to be charged is reasonable. Any discussion of the issue presented to the Committee is based upon an assumption that the attorney has complied with RPC 1.5(e).
In the present case, the petitioner, "A", is a certified civil trial attorney. He represented the estate of the deceased motor vehicle passenger. The referring attorney, "B", represented the driver-husband of the decedent.
"B" subsequently filed suit on behalf of the widower against the owner-operator of the other vehicle. The cases were consolidated for trial and then settled. In addition to the widower, decedent was survived by elderly parents who resided in the same building as decedent. The parents sought damages as part of the claim under the wrongful death action based upon the value of services rendered by decedent to her invalid mother.
In the inquiry before the Committee, attorney "A" had a duty to obtain the maximum possible settlement for the estate, the primary beneficiary of the estate being the husband of the decedent, a defendant in the referred case and plaintiff in the consolidated case. Separate counsel were retained in the two actions. In fact, a third attorney represented the defendant-husband in the action by the estate. This situation is clearly not a case of one attorney representing multiple parties. The question here is whether the sharing of the inquiring attorney's fee with the referring attorney is a conflict of interest, or in the alternative, whether the fee-sharing raises an appearance of impropriety.
On its face, the interests of all of the parties would not be harmed by a sharing of the fee. The parties had independent counsel, and the ultimate goal was to obtain the greatest possible recovery for the estate and the husband. However, the referring attorney did represent a party whose interest was adverse to that of the attorney in the estate's action. For the attorneys to share a fee raises a question as to whether or not the attorneys may have shared information which might have been privileged in order to advance the interests of one party.
The Supreme Court, in In re Cohn, 46 N.J. 202, 211-213 (1966), said that it is improper for an attorney to accept a retainer from a client when that client is a witness in a pending matter against another of the attorney's clients. In addition to its concern for the clients in the case under consideration, the Court expressed concern as to how knowledge of the relationship would affect the public's respect for law and order. "Public knowledge of those relationships could and probably would engender, at the least, a serious doubt about the integrity of the proceeding." In re Cohn, supra, at 213. It was unethical for the attorney to place himself in a position where he could influence a witness in a manner to be favorable to his client.
The question here is not whether any witness was improperly influenced, but whether there is an appearance of impropriety. "To maintain public confidence in the bar, it is necessary that the appearance of, as well as actual, wrongdoing be avoided." In re Opinion 415, 81 N.J. 318, 323 (1979), quoting In re Cipriano, 68 N.J. 398, 403 (1975).
The inquiry, then, must turn to what creates an appearance of impropriety. The Supreme Court stated that, "We agree that the 'appearance' of impropriety must be something more than a fanciful possibility. It must have some reasonable basis. However, where as here, a reasonable basis is shown to exist, 'appearance' alone may be sufficient to present an ethical problem even though no actual impropriety exists." Higgins v. Advisory Committee on Professional Ethics, 73 N.J. 123, 129 (1977).