PR Class 9 10/13/16 Final Exam: 10/28/16

Tonight Conflicts Chapter 11 & 12 Textbook: pp. 319-388 Take Home Exam on Conflicts

Next Week – 10/20/16 - Class 10 Pizza night Go Over Take Home Exam on Conflicts Continue Conflicts Flatt v. Superior Court 9 Cal 4th 275 Brooklyn Navy Yard v. Superior Court 60 Cal App 4th 248

What is a conflict of interest? Simply put, it is a situation where an attorney’s duty to one client conflicts with his duty to another client-- for example, if an attorney were to represent both parties in a divorce proceeding

A common conflicts problem occurs when an attorney accepts employment and later discovers that the employment presents a conflict of interest due to representation of a current or former client. Q. How can this problem be avoided?

A. Pre-Screen for conflicts Prescreening avoids conflicts! To avoid conflicts, attorneys should screen prospective clients BEFORE interviewing a new client.

How to Screen for conflicts Conflict-Checking Systems: Three Great (and Cheap) Ways to Effectively Manage Conflict Checking by Todd C. Scott, Esq. http://www.americanbar.org

Author’s comments Professional liability insurers and risk management professionals continually stress the importance of a conflict-checking system in law firms to help identify potential conflicts at the time the attorney-client relationship is established. Consistently, it has been shown that a check for conflicts-of-interest that does not include the use of a thorough list or database will leave the firm vulnerable to an embarrassing, and potentially negligent conflict-of-interest problem.

“If the attorneys do not implement safeguards and structure their practices in a way that under the circumstances reasonably ensures the maintenance of their clients' confidential information, they may violate not only their duty to protect their clients' confidential information, but also their obligation to perform their duties competently… Serious and inexcusable lapses in office procedure resulting in fiduciary violations may be deemed willful for disciplinary purpose.”

An effective conflict check system *Establish a thorough, well-maintained list of names; *Ensure that the conflict-checking procedure becomes a part of firm’s routine; *Everyone in the firm is trained in the procedure and involved in the system.

Multiple Representation of clients in Civil or Criminal cases Conflict Situation #1 Multiple Representation of clients in Civil or Criminal cases

Civil Case In a personal injury case, an attorney represents the passenger and driver who were both injured in an automobile accident. The passenger wants to accept an early settlement offer but the driver wants to wait for a better offer. Or the driver may have some comparative fault that may affect the amount of settlement to the passenger. The attorney has a conflict in representing both clients.

Criminal case Two criminal defendants are represented by the same attorney. The DA offers one defendant a plea bargain in exchange for testimony against the co- defendant. The attorney has a conflict of interest in representing both defendants.

Conflicts usually occur when the attorney represents multiple parties in the same action. Multiple representation may make “undivided loyalty” difficult. When potential or actual conflicts exist, attorneys must comply with CRPC 3-310 which requires written informed consent from the multiple clients.

CRPC 3-310 Avoiding the Representation of Adverse Interests “…(B) A member shall not accept or continue representation of a client without providing written disclosure to the client where: (1) The member has a legal, business, financial, professional, or personal relationship with a party or witness in the same matter; or

(2) The member knows or reasonably should know that: (a) the member previously had a legal, business, financial, professional, or personal relationship with a party or witness in the same matter; and (b) the previous relationship would substantially affect the member's representation; or

(3) The member has or had a legal, business, financial, professional, or personal relationship with another person or entity the member knows or reasonably should know would be affected substantially by resolution of the matter; or (4) The member has or had a legal, business, financial, or professional interest in the subject matter of the representation.

CRPC 3-310(C) A member shall not, without the informed written consent of each client: (1) Accept representation of more than one client in a matter in which the interests of the clients potentially conflict; or (2) Accept or continue representation of more than one client in a matter in which the interests of the clients actually conflict; or

CRPC 3-310(C) (3) Represent a client in a matter and at the same time in a separate matter accept as a client a person or entity whose interest in the first matter is adverse to the client in the first matter.

CRPC 3-310 (D) A member who represents two or more clients shall not enter into an aggregate settlement of the claims of or against the clients without the informed written consent of each client. (E) A member shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment.

CRPC 3-310 (F) A member shall not accept compensation for representing a client from one other than the client unless: (1) There is no interference with the member's independence of professional judgment or with the client-lawyer relationship; and (2) Information relating to representation of the client is protected as required by Business and Professions Code section 6068, subdivision (e); and

Business Transactions with Clients Conflict Situation #2 Business Transactions with Clients

CRPC 3-300 A member shall not enter into a business transaction with a client; or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client, unless each of the following requirements has been satisfied: (A) The transaction or acquisition and its terms are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which should reasonably have been understood by the client; and

(B) The client is advised in writing that the client may seek the advice of an independent lawyer of the client's choice and is given a reasonable opportunity to seek that advice; and (C) The client thereafter consents in writing to the terms of the transaction or the terms of the acquisition.

Former Client as a Witness Conflict Situation #3 Former Client as a Witness

A conflict can occur when an attorney represents a party in a case and formerly represented another person who is now a witness in the represented party’s case. The attorney is prevented from using confidential information acquired during the attorney-client relationship to the detriment of either the current client or the former client who is now a witness. Q. Why is this a problem?

A. A conflicts exists if the attorney is forced to choose between providing effective representation to the current client and protecting the confidences of the witness/former client. For example, a conflict exists if the attorney knows certain confidential information gleaned from the witness/former client will help his current client by cross examination of the witness but cannot reveal it because it is protected from disclosure by the attorney-client privilege. The attorney has “divided loyalties”. B&P Code 6068(e); CRPC 3-310(E)

Attorney Fees Paid by third person Conflict Situation #4 Attorney Fees Paid by third person

If someone other than the client is paying the attorney fees, a conflict may occur if the third person demands to determine how the case should be controlled, or demands to know the specific facts obtained from the client by the attorney. “Divided loyalties” may occur since the attorney is prevented from disclosing the client’s confidences to anyone, including the third person paying for the client’s representation. CRPC 3-310(F)

Written Consent also required CRPC 3-310(F)(3) “…and, The member obtains the client's informed written consent, …

Attorney Relationships Conflict Situation #5 Attorney Relationships

Attorney Sexual Relations: 1. With Client 2. With Attorney for other party 3. With Others

1. Sexual Relations with Client Sexual relations with a client may become the basis of bar sanctions as well as the basis of a lawsuit against the attorney for violation of fiduciary duties owed to the client.

CRPC - Rule 3-120 Sexual Relations With Client … (B) A member shall not: (1) Require or demand sexual relations with a client incident to or as a condition of any professional representation; or (2) Employ coercion, intimidation, or undue influence in entering into sexual relations with a client; or (3) Continue representation of a client with whom the member has sexual relations if such sexual relations cause the member to perform legal services incompetently in violation of rule 3-110.

(C) Paragraph (B) shall not apply to sexual relations between members and their spouses or to ongoing consensual sexual relationships which predate the initiation of the lawyer-client relationship. (D) Where a lawyer in a firm has sexual relations with a client but does not participate in the representation of that client, the lawyers in the firm shall not be subject to discipline under this rule solely because of the occurrence of such sexual relations.

ABA Model Rule 1.8 Conflict Of Interest: Current Clients: …(j) A lawyer shall not have sexual relations with a client unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced.

2. Relationship With Other Party's Lawyer CRPC Rule 3-320 A member shall not represent a client in a matter in which another party's lawyer is a spouse, parent, child, or sibling of the member, lives with the member, is a client of the member, or has an intimate personal relationship with the member, unless the member informs the client in writing of the relationship. Discussion: Rule 3-320 is not intended to apply to circumstances in which a member fails to advise the client of a relationship with another lawyer who is merely a partner or associate in the same law firm as the adverse party's counsel, and who has no direct involvement in the matter.

ABA Model Rule 1.17 [ Comment11] When lawyers representing different clients in the same matter or in substantially related matters are closely related by blood or marriage, there may be a significant risk that client confidences will be revealed and that the lawyer’s family relationship will interfere with both loyalty and independent professional judgment. As a result, each client is entitled to know of the existence and implications of the relationship between the lawyers before the lawyer agrees to undertake the representation.

Comment 11 – cont’d Thus, a lawyer related to another lawyer, e.g., as parent, child, sibling or spouse, ordinarily may not represent a client in a matter where that lawyer is representing another party, unless each client gives informed consent. The disqualification arising from a close family relationship is personal and ordinarily is not imputed to members of firms with whom the lawyers are associated. See Rule 1.10.

3. Relationship with others An intimate relationship with someone close to the client, a witness, or the judge or court personnel, should be disclosed to the court and should be disclosed to the client and opposing party. Barbara A. v. John G. (1983) 145 Cal App 369

Potential Conflict: Sharing office space Attorneys sharing space or staff must take reasonable steps to ensure that their clients and potential clients are not deceived, misled, or confused about the nature of the office sharing relationship. Attorneys may ethically share space and staff so long as they take reasonable steps under the circumstances to protect against: (1) misleading the public or clients regarding the nature of their relationship; and (2) the disclosure of clients' confidential information to other attorneys or staff in the office. Cal Bar opinion 1997-150.

Waiver of a conflict of interest Waiver of any conflict of interest require informed written consent from all affected clients. However, in some circumstances, a conflict of interest can never be waived by a client.

For example A California lawyer who represented two reputed gang members in related criminal cases is conflicted out of continuing to defend one of them in a triple-murder prosecution, even though both clients gave him written waivers, a judge. Although defendant Edwin Ramos, 22, said he wanted to keep Robert Amparan as his lead lawyer, the fact that Amparan also represents Douglas Largaespada, who is to scheduled to testify against Ramos at trial, is a fatal conflict. The judge stated Amparan could not properly represent Ramos because of his prior relationship with Largaespada, which would prevent him from cross-examining Largaespada on the stand,” even though both men have signed written waivers of the conflict of interest.

Withdrawals Permissive Mandatory

CRPC 3-700 – Termination of Employment (A) In General. (1) If permission for termination of employment is required by the rules of a tribunal, a member shall not withdraw from employment in a proceeding before that tribunal without its permission. (2) A member shall not withdraw from employment until the member has taken reasonable steps to avoid reasonably foreseeable prejudice to the rights of the client, including giving due notice to the client, allowing time for employment of other counsel, complying with rule 3-700(D), and complying with applicable laws and rule

Mandatory Withdrawal A member representing a client before a tribunal shall withdraw from employment with the permission of the tribunal, if required by its rules, and a member representing a client in other matters shall withdraw from employment, if: (1) The member knows or should know that the client is bringing an action, conducting a defense, asserting a position in litigation, or taking an appeal, without probable cause and for the purpose of harassing or maliciously injuring any person; or

(2) The member knows or should know that continued employment will result in violation of these rules or of the State Bar Act; or (3) The member's mental or physical condition renders it unreasonably difficult to carry out the employment effectively.

Permissive withdrawal If rule 3-700(B) is not applicable, a member may not request permission to withdraw in matters pending before a tribunal, and may not withdraw in other matters, unless such request or such withdrawal is because: (1) The client (a) insists upon presenting a claim or defense that is not warranted under existing law and cannot be supported by good faith argument for an extension, modification, or reversal of existing law, or (b) seeks to pursue an illegal course of conduct, or

(c) insists that the member pursue a course of conduct that is illegal or that is prohibited under these rules or the State Bar Act, or d) by other conduct renders it unreasonably difficult for the member to carry out the employment effectively, or (e) insists, in a matter not pending before a tribunal, that the member engage in conduct that is contrary to the judgment and advice of the member but not prohibited under these rules or the State Bar Act, or (f) breaches an agreement or obligation to the member as to expenses or fees.

(2) The continued employment is likely to result in a violation of these rules or of the State Bar Act; or (3) The inability to work with co-counsel indicates that the best interests of the client likely will be served by withdrawal; or (4) The member's mental or physical condition renders it difficult for the member to carry out the employment effectively; or (5) The client knowingly and freely assents to termination of the employment; or (6) The member believes in good faith, in a proceeding pending before a tribunal, that the tribunal will find the existence of other good cause for withdrawal.

ABA Rules on Mandatory Withdrawal (a) Except as stated in paragraph (c), a lawyer shall not represent a client or, where representation has commenced, shall withdraw from the representation of a client if: (1) the representation will result in violation of the rules of professional conduct or other law; (2) the lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client; or (3) the lawyer is discharged.

ABA Rules on Permissive Withdrawal (b) Except as stated in paragraph (c), a lawyer may withdraw from representing a client if: (1) withdrawal can be accomplished without material adverse effect on the interests of the client; (2) the client persists in a course of action involving the lawyer's services that the lawyer reasonably believes is criminal or fraudulent; (3) the client has used the lawyer's services to perpetrate a crime or fraud;

(4) the client insists upon taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement; (5) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer's services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled; (6) the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client; or (7) other good cause for withdrawal exists.

(c) A lawyer must comply with applicable law requiring notice to or permission of a tribunal when terminating a representation. When ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating the representation. (d) Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. The lawyer may retain papers relating to the client to the extent permitted by other law.

Employers Ins v. Seeno P. 324

Tripartite Relationship The insured The insurance company The attorney

Duties in Seeno Wausau has a duty to defend the civil case Wausau has duty to indemnify insured Seeno attorney has duty to defend in civil case Seeno attorney is also Cumis counsel

What is the conflict in Seeno? Follow the money

Phillips v. Carson P. 332

State v. White P. 336

State Farm v. K.A.W. P. 351

Kirk v. First Amer Title P. 356

Cho v. Superior Court P. 366

Goldberg v. Warner P. 371