Conflict of Interest Suing Client in Unrelated Action

110 N.J.L.J. 408
October 7, 1982

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS
 
Appointed by the New Jersey Supreme Court
 

OPINION 507

Conflict of Interest
Suing Client in Unrelated Action

We quote the inquiry in the language presented to us:

QUESTION: May an attorney properly undertake a negligence action against an individual who he had formerly represented in two unrelated matters where a judgment remains outstanding from one matter which judgment will in part be used to provide the attorney's contingent fee?
 
The facts as presented are as follows: The attorney apparently had been retained by the client (whom he now proposes to oppose) in a collection matter which the attorney undertook to handle on a contingent fee basis; i.e., a percentage of the amount collected. The attorney instituted suit and obtained a judgment in the county District Court, which was subsequently docketed in the Superior Court. Discovery proceedings were then instituted; the debtor never attended the discovery hearing and since that time; namely, October 1980, no action for the collection of the judgment has been taken in connection with the matter. Although the inquirer states "I did not intend to do anything further regarding this collection file and have not, in fact, taken any further action on it," nevertheless, the file and the matter is a pending matter in his office and the representation with reference thereto is a continuing one. Additionally, he also represented the same client in another matter involving a suit for breach of contract which, after an 8-day trial, resulted in a judgment dismissing his client's Complaint. That matter appears to have been completed. He further advises that he has "now been requested to represent a client in a workers compensation and/or negligence claim against my former client, his spouse and/or a corporation in which they are officers." The inquirer characterizes his client as "my former client." We do not agree with such characterization.
In presenting the inquiry the inquirer states that, if it is necessary, he is willing to waive the contingency fee with reference to the judgment in the collection matter in its entirety.
The problem posed by this inquiry is one with which we have dealt heretofore. Based upon the facts as presented, it is clear that there is a continuing representation by the attorney of the client. He has a duty, in the absence of being released therefrom by the client, to continue to exert such efforts as are reasonably necessary in behalf of said client to collect the judgment. The representation of the client is on-going; it has not ended. The disqualification involves two basic ethical principles; namely, the matter of a "conflict of interest" as well as "avoiding the appearance of impropriety." See our Opinions 43, 154, 313, 367 and 391. Even if the attorney/client relationship has been terminated, nevertheless, we hold that, based upon the facts as presented, the inquirer could not undertake the new representation.
In our Opinion 301, 98 N.J.L.J. 209 (1975), we cited with approval the following, which is equally applicable, on the facts presented, to the instant inquiry:

In Wise, Legal Ethics (1966) 155, appears the following statement:

The impropriety of taking a case against a former client is not based solely on necessity for disclosure of confidential communications. If the former client has any reason to feel aggrieved, the necessity of maintaining proper public relations for the bar and of avoiding the appearance of wrongdoing should cause the attorney to refuse to accept employment in a capacity adverse to the interests of a former client.
 
In the absence of an informed consent by all parties concerned terminating the present attorney/client relationship and consenting to the new proposed adversarial representation, the inquirer is barred from such undertaking. See our Opinion 43, 87 N.J.L.J. 285
(1964)

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