A Lawyer was retained and given specific directives to establish a living trust for the grandchildren of a client. Prior to the finalization of the trust the client died; however the children were listed as beneficiaries on a life insurance policy and, because they are minors, the funds are being withheld by the insurance company until they reach the legal age determined by the state. That arrangement is being contested; and the lawyer is now representing the opposing party in pursuing actions that are in direct conflict to the directives given by the former client.
It is not necessarily a conflict but it may be depending on the facts. There seems to be problems in this as a trust or will does not necessarily supersede the beneficiaries listed on the policy since it is regulated by federal law. I would talk to an estate or probate attorney because there may be nothing that can be done considering the policy already listed beneficiaries.
This is just my opinion and not a comprehensive answer. You assume the risk because this answer may not apply to your situation depending on the facts.
It might be a conflict of interest. In determining whether an attorney should be disqualified by reason of a conflict of interest, two rules are potentially implicated.
The first is the per se rule of disqualification which generally prevents an attorney from undertaking a representation which is adverse to a current client. The attorney's duty of undivided loyalty prevents such simultaneous representation, even on matters which are wholly unrelated, without the informed written consent of both clients.
The second rule governs successive representation of clients with adverse interests. An attorney is forbidden from undertaking a representation adverse to a former client if there is a “substantial relationship” between the current and former matters. This prohibition stems from the attorney’s duty to maintain client confidences. (Morrison Knudsen Corp. v. Hancock, Rothert & Bunshoft (1999) 69 Cal.App.4th 223, 230.)
Pursuant to Rule of Professional Conduct 3-310(D), an attorney may not accept employment adverse to a client or former client where, by reason of the representation, the attorney has obtained confidential information. The purpose of the rule is to protect the confidential relationship, which continues even after the formal relationship ends. The fiduciary nature of that relationship requires the application of strict standards.
In determining whether there is a substantial relationship between the former representation and the current representation, the Court looks to “the practical consequences of the attorney's representation of the former client” and considers “whether confidential information material to the current dispute would normally have been imparted to the attorney by virtue of the nature of the former representation.” (H.F. Ahmanson & Co. v. Salomon Brothers, Inc. (1991) 229 Cal.App.3d 1445, 1454.) In doing so, the court focuses on the similarities between the two factual situations, the legal questions posed, and the nature and extent of the attorney's involvement with the cases, including “the time spent by the attorney on the earlier cases, the type of work performed, and the attorney’s possible exposure to formulation of policy or strategy. Where there is a substantial relationship between the current and former representation, a conclusive presumption is triggered that the attorney possesses confidences that could prejudice the former client in the present matter.
The substantial relationship test is broad and not limited to the strict facts, claims and issues involved in a particular action. The legal theories and issues that an attorney discusses with a former client may be different than those involved in the subsequent lawsuit against that client. Where an attorney acquires knowledge about the former client’s “attitudes,” practices, business customs, “litigation philosophy,” strengths, weaknesses or strategy, disqualification may be required for that reason alone. (Knight v. Ferguson (2007) 149 Cal.App.4th 1207, 1213-1215; citing Jessen v. Hartford Cas. Ins. Co. (2003) 111 Cal.App.4th 698, 712.)
While a party’s choice of counsel is a fundamental right and disqualification is a drastic measure, there are clearly circumstances where disqualification is necessary based on the attorney’s duty of confidentiality. A presumption that an attorney has access to privileged and confidential matters relevant to a subsequent representation extends the attorney’s disqualification vicariously to the entire firm. (People Ex Rel. Dept. of Corporations v. Speedee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1146.) “The vicarious disqualification rule recognizes the everyday reality that attorneys, working together and practicing law in a professional association, share each other’s, and their clients’, confidential information.” (Id., at pp. 1153-1154.)
Frank W. Chen is licensed to practice law in the State of California. The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult your own attorney.
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