ETHICS OPINION 350-1939

NUMBER 350 1939

Question. A is the owner of an automobile and is insured in X insurance company against liability for accidents under a policy which provides that the insured agrees that in the event of any suit against her, the insurance company may choose the attorney who shall defend the suit, and agrees further that she will cooperate with the company in the defense of the action. While A is driving her parents, B and C, in her car there is an accident, and B and C are injured. They sue their daughter A for damages for negligence, Pursuant to the provisions of the policy, X insurance company chooses D as attorney who appears for A in the negligence suit and files an answer, confers with her, and examines her as to the occurrence of the accident. While the negligence action is pending and while D is still the attorney for A therein, the X insurance company by D, as its attorney, commences an action in equity against A, B, and C, the plaintiffs and the defendant in the negligence action, and prays for a declaratory judgment that the insured, A, in violation of the terms of the policy, has failed to cooperate in the defense of the negligence action. The defendant, A, is served with process and retains other counsel to defend that suit.

Is D guilty of unprofessional conduct in commencing and prosecuting the equity action on behalf of the X insurance company against A under the foregoing state of facts?

Answer. In its answer in Opinion 202, the Committee stated:

In the opinion of the Committee the rendition of professional services by an attorney to one party to a litigation, which thus establishes necessarily a relation of trust and confidence, precludes the acceptance of employment by such attorney in any subsequent phase of the same litigation by the adverse party. . . . . . . . Irrespective of any actual detriment, the first client might naturally feel that he had in some way been wronged when confronted by a final decree obtained by a lawyer employed in his behalf in an earlier part of the same litigation. To maintain public confidence in the Bar it is necessary not only to avoid actual wrongdoing but an appearance of wrongdoing.

In the opinion of the Committee, the principle underlying the answer in Opinion 202 is applicable to the present question. Despite the answer in Opinion 119, the Committee believes that the fact that the attorney, in representing the insurer in the action against the assured and others, may not be representing conflicting interests within the scope of the rule reprobating inconsistent employment should not be deemed decisive. The Committee is further of the opinion that, despite the absence of any conflict of interest, maintenance of public confidence in the Bar requires an attorney who has accepted representation of a client to decline, while representing such client, any employment from an adverse party in any matter even though wholly unrelated to the original retainer. The Committee, therefore, believes that the conduct of D in accepting the employment in the equity action was improper.

The course of conduct to be followed by the attorney if he desires to withdraw from representation of the assured is indicated in the answer to Opinion 318.