ETHICS OPINION 523-1964 CONFLICT OF INTEREST

NUMBER 523

QUESTION.

 

I represent a client (T) who agreed to indemnify a bonding company (B) which wrote a labor and materials performance bond for a general contractor (F) on a construction job.

 

A sub-contractor (E) who had supplied material and labor to the job brought a suit against (B) on the bond. (B) brought (T) into the action; (T) brought (F) into the action; and (F) has brought the owner (Y) into the action,

 

(F) is in financial difficulties. It has no funds with which to pay counsel and its present lawyer desires to withdraw from the case.

 

The interests of (B), (F) and (I) insofar as they relate either to the diminution of (E)’s claim or to recovery for that claim are harmonious.

 

(F), (B) and (T) have asked me to represent the Interests of (F) as well as the interest of (T) Theoretically the interests of (F) and (T) would conflict only to the extent of (T)’s claim against (F) which the latter on advice of his first attorney, is however willing to concede if (E) recovers.

 

Under the circumstances, would it be proper for me to represent (F) as well as (T)?

 

ANSWER.

 

Canon 6 of the Canons of Professional Ethics, entitled “Adverse Influences and Conflicting Interests” provides:

 

“It is the duty of a lawyer at the time of retainer to disclose to the client all the circumstances of his relations to the parties, and any interest in or connection with the controversy, which might influence the client in the selection of counsel.

 

“It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose.

 

“The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidences forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed.”