Recent N.Y. Ethics Opinions: November 2015
By Tyler Maulsby, Associate, Frankfurt Kurnit Klein & Selz
Here are summaries of ethics opinions issued June, July, and September 2015. The opinions were issued by the NYSBA Committee on Professional Ethics and the NYC Bar Association Committee on Professional Ethics. NYLER will continue to provide updates on new ethics opinions issued by these and other ethics committees in New York State.
For information about how to obtain an ethics opinion from the NYS Bar Association Committee on Professional Ethics, please visit http://www.nysba.org/Ethics/.
For information about how to obtain an ethics opinion from the NYC Bar Association Committee on Professional Ethics, please visit http://www.nycbar.org/ethics/informal-ethics-opinions/.
NEW YORK STATE BAR ASSOCIATION OPINIONS
NYSBA Ethics Op. 1063 (June 29, 2015):
Accepting Representation Adverse to a Third Party Payor
In Opinion 1063 a lawyer agreed to represent an 18-year-old client in a criminal matter and accept payment from the client’s divorced parents. During the lawyer’s representation in the criminal matter, the mother of the lawyer’s client retained the lawyer in two cases against the father—one a custody dispute (involving a different child) and one a child support matter in which the son is among the subjects of child support at issue. The Opinion addresses whether the lawyer is ethically permitted to represent the mother in an action adverse to the father when he is receiving payment from the father in a separate matter. Under Rule 1.8(f) a lawyer may accept payment from a third party provided the client gives informed consent, there is no interference with the lawyer’s independent professional judgment or with the attorney-client relationship, and that the lawyer protects the client’s confidential information as required by Rule 1.6. Citing a previous New York State Bar ethics opinion, the Opinion notes that Rule 1.8(f) allows a lawyer to accept payment from a third party even if the third party’s interests are potentially adverse to the client’s interests. The Opinion concludes, therefore, that the lawyer would not violate Rule 1.8(f) if he were adverse to the father. The Opinion then analyzes whether the lawyer’s representation of the mother would create a conflict of interest under Rule 1.7. Assuming the lawyer has not led the father to believe that he is a client, the Opinion reasons, the lawyer would not be representing two clients with differing interests in violation of Rule 1.7(a)(1). However, the lawyer may have a personal interest conflict in violation of Rule 1.7(a)(2) if a reasonable lawyer would conclude that the lawyer’s “interest in continuing to receive fees from the Father for representing the Son would create a ‘significant risk’ of adversely affecting the [lawyer’s] professional judgement on behalf of the Mother.” Even if such a conflict exists, however, the lawyer could still represent the mother if he believed that he could provide competent and diligent representation notwithstanding the conflict and he obtained informed consent in writing from the Mother.
The full opinion is available at: https://www.nysba.org/CustomTemplates/Content.aspx?id=57391.
NYSBA Ethics Op. 1064 (July 10, 2015):
Conflicts of Interest with Former Judges in Private Practice
Opinion 1064 addresses whether a former family court judge can represent clients in two matters in which the inquirer participated while a judge. In the first matter, the inquirer sought to represent a litigant in a neglect action when the inquirer, as a judge, signed a consent order stipulating that the subject child be placed in foster care. The inquirer had no involvement in that case beyond the one order. In the second matter, the inquirer sought to represent a client in a child support proceeding when the inquirer, as a judge, rendered multiple decisions concerning custody and visitation concerning the same subject children. The judge’s prior orders would need to be revisited in the child support proceeding. The Opinion reasons that the inquirer’s two scenarios are governed by Rule 1.12 which addresses conflicts of interest with former judges in private practice. Rule 1.12(a) prohibits a lawyer from representing a client “in a matter upon the merits of which the lawyer has acted in a judicial capacity.” If such a conflict exists, it is non-waivable. The Opinion reasons that the inquiry therefore turns on whether the inquirer was acting in her “judicial capacity”, whether the proposed representation is part of the same “matter”, and whether the inquirer’s involvement as a judge involved the “merits.” The Opinion concludes that the inquirer was acting in her “judicial capacity” in both matters. Comment  to Rule 1.12, states that a judge “is not prohibited from acting as a lawyer in a matter where he or she exercised remote or incidental administrative responsibility that did not affect the merits.” The Opinion reasons, however, that the judge’s involvement in both of the described matters did affect the merits because it “affect[ed] the legal rights of the parties.” The Opinion notes that such an interpretation of the term “merits” is broader than the generally accepted legal definition but that a broader interpretation is appropriate in the context of Rule 1.12. Similarly, the Opinion concludes that both cases are the same “matter” for the purposes of Rule 1.12(a). Citing to prior New York State Bar ethics opinions, the Opinion applied the “facts, parties and time” test, which comes from Comment  to Rule 1.9. The Comment states: “In determining whether two particular matters are the same, the lawyer should consider the extent to which (i) the matters involve the same basic facts, (ii) the matters involve the same or related parties, and (iii) time has elapsed between the matters.” The Opinion reasons that both of the inquirer’s proposed scenarios have sufficiently similar underlying facts and parties and are close enough in time to be considered the same “matter.” Though the lawyer would be prohibited from taking on the proposed representations, the opinion notes, the conflict would not be imputed to the lawyer’s firm provided the other lawyers in the firm were properly screened in accordance with Rule 1.12(d). The Opinion also takes care to note that it cannot address whether the proposed conduct would also violate the Code of Judicial Conduct or any applicable statues and regulations.
The opinion is available at: https://www.nysba.org/CustomTemplates/Content.aspx?id=57801.
NYSBA Ethics Op. 1065 (July 10, 2015):
Conflicts of Interest for a Part-Time Government Attorney
Opinion 1065 addresses whether a law firm with a lawyer who serves as a part-time Deputy Town Attorney may bring an Article 78 proceeding against the Village based on allegedly improper actions taken by the Village’s zoning or planning board. Though the Village and the Town share certain resources, the lawyer who is the Deputy Town Attorney does not prosecute building and zoning laws and is not supervised by the office in charge of enforcing those laws. The Opinion analyzes Rule 1.7, that governs conflicts of interest and Rule 1.10 that prohibits a law firm from representing any client when any one lawyer practicing alone would be prohibited from representing that client. The Opinion draws largely from past New York State Bar opinions that have addressed the private practice of law by part-time government prosecutors. Ultimately the Opinion reasons that while it would be impermissible for the inquirer (and therefor the inquirer’s firm) to be adverse to law enforcement personnel with whom the inquirer had worked or is likely to work as Deputy Town Attorney, the proposed scenario would unlikely involve such adversity. Therefore, assuming there is no conflict under Rule 1.7(a), since there is no direct adversity, the representation would be permissible. The Opinion cautions, however, that the inquirer would still be prohibited by Rule 1.11(f) from using any influence as a public official in furtherance of the representation.
The opinion is available at: https://www.nysba.org/CustomTemplates/Content.aspx?id=57802.
NYSBA Ethics Op. 1066 (July 13, 2015):
Lawyer as a Guarantor for a Client’s Financing Obligation
In Opinion 1066 the inquiring lawyer asked the Committee whether the lawyer’s firm could guarantee a client’s obligation to repay a bank for financing that was incurred in order to pay the lawyer’s retainer in a criminal matter. The Opinion analyzes Rule 1.8(e), which states that “[w]hile representing a client in connection with contemplated or pending litigation, a lawyer shall not advance or guarantee financial assistance to the client”, subject to three exceptions. The only relevant exception, the Opinion reasons, is Rule 1.8(e)(1), which allows a lawyer to advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter. The Opinion notes that even though Rule 1.5(d)(1) prohibits a lawyer from charging a contingent fee in a criminal matter, a lawyer may still advance court costs and litigation expenses in a criminal matter, the repayment of which may be contingent on the outcome. Rule 1.8(e)(1), however, does not authorize the lawyer to guarantee costs or expenses and is expressly prohibited by the introduction to the Rule. The lawyer, therefore, would be prohibited from entering into such an arrangement. The Opinion also notes that even if the lawyer only helps the client negotiate a loan, such advice could also give rise to a number of ethical issues depending on the lawyer’s interest in the transaction.
The opinion is available at: https://www.nysba.org/CustomTemplates/Content.aspx?id=57803.
NEW YORK CITY BAR ASSOCIATION OPINIONS
N.Y. City Formal Eth. Op. 2015-6 (Sept. 2015):
Duty to Notify Clients When Their Files Are Accidentally Destroyed
Opinion 2015-6 addresses a lawyer’s ethical obligations when client files are inadvertently destroyed in an accident or disaster. Specifically, the Opinion addresses when a lawyer must notify a client that files relating to the legal matter have been destroyed. The Opinion reasons that the New York Rules impose certain obligations on lawyers with respect to property and files belong to clients and third persons both during and after the representation. For instance, Rule 1.15(a) designates the lawyer as a “fiduciary” to the owner of any property or funds that the lawyer is holding incident to the lawyer’s practice of law. Similarly, Rule 1.15(c)(4) requires the lawyer to “deliver to the client or third person as requested by the client or third person the…properties in the possession of the lawyer that the client or third person is entitled to receive.” See also Rule 1.16(e) (lawyer must deliver to the client “all papers and property to which the client is entitled” at the end of the representation). Though the client’s specific property interest in a lawyer’s files is a legal question on which the Committee cannot opine, the Opinion notes that, under New York case law, clients generally have a property interest—or, at minimum, free access to—most documents or other materials relating to their matters. Therefore, the duty to preserve client files continues for at least some period of time after the representation ends. Because of the lawyer’s duty to preserve client files for a period of time, the lawyer therefore also has a duty to notify the client or former client in certain circumstances if files are destroyed. This conclusion is based on Rule 1.4, which requires an attorney to “promptly inform the client of material developments in the matter,” keep clients “reasonably informed about the status of a matter,” and “promptly comply with a client’s reasonable requests for information.” Rule 1.4(a)(1)(iii), (a)(3), (a)(4). The Opinion notes that a lawyer’s fiduciary duty under Rule 1.15(a) also supports this conclusion. Of course, the lawyer’s duty to notify clients about destroyed files is not triggered in every circumstance since the lawyer is only required to notify the client about “material” developments in the matter. The Opinion sets forth a three-tier framework for categorizing client files. Category 1 consists of documents with “intrinsic value or those that directly affect property rights,” such as “wills, deeds and negotiable instruments.” Category 2 consists of documents that the lawyer “knows or should know may still be necessary or useful to the client.” Category 3 consists of documents with relatively little importance that would “furnish no useful purpose in serving the client’s present needs for legal advice.” The Opinion concludes that a lawyer should notify a client or former client if Category 1 documents are destroyed in a disaster. Conversely, a lawyer need not notify the client or former client if Category 3 documents are destroyed. Category 2 documents must be analyzed on a case-by-case basis. If the documents relate to an open matter, the Opinion concludes that the lawyer must notify the client of their destruction. If the matter is closed, a more nuanced approach is required to determine whether the “client foreseeably may need” the documents. The Opinion also analyzes several other ethical duties that may be implicated when files are inadvertently destroyed including a lawyer’s duty of competence and duty to safeguard confidential information.
The opinion is available at: http://www.nycbar.org/ethics/ethics-opinions-local/2015opinions/2208-formal-opinion-2015-6-duty-to-notify-clients-when-their-files-are-accidentally-destroyed.
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