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End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.


Florida Legal Ethics

1.7   Rule 1.7 Conflict of Interest: General Rule

1.7:100   Comparative Analysis of Florida Rule

Primary Florida References: FL Rule 4.1-7
Background References: ABA Model Rule 1.7, Other Jurisdictions
Commentary:

1.7:101      Model Rule Comparison

The Florida Rule is substantially similar to MR 1.7, except for a provision restricting lawyers who are related by blood or marriage from accepting adverse representation except upon consent by the client after consultation regarding the relationship, the substance of which is found in MR 1.8(i). The Florida Rule comment states that this disqualification is personal and not imputed to members of firms with whom the related lawyers are associated. Like the comment to MR 1.7, the Florida Rule Comment provides that subdivision (a) applies only when the representation of one client would be directly adverse to the other, but the Florida Rule comment states that subdivision (a) also applies where the lawyer's responsibilities of loyalty and confidentiality of the other client might be compromised. The Florida Rule comment also specifies that in the administration of an estate, the personal representative is the client, rather than the estate or the beneficiaries.

1.7:102      Model Code Comparison

DR 5-101(A) provides that a lawyer may not accept employment if the lawyer's professional judgment will be or reasonably may be affected by the lawyer's own interest, except with the informed consent of the client. FL Rule 4-1.7(b) also requires that the lawyer must reasonably believe that the representation will not be adversely affected by the lawyer's personal interests. DR 5-105(C) contains a conflict requirement substantially similar to FL Rule 4-1.7(a).

1.7:200   Conflicts of Interest in General

Primary Florida References: FL Rule 4-1.7
Background References: ABA Model Rule 1.7, Other Jurisdictions
Commentary: ABA/BNA § 55:101, ALI-LGL §§ 121-124, Wolfram §§ 7.1-7.6

1.7:210      Basic Prohibition of Conflict of Interest

FL Rule 4-1.7(a) bars a lawyer from representing a client whose interests will be directly adverse to another client's interests unless (1) the lawyer has a reasonable belief in the ability to effectively represent the client, and (2) the other client consents to the representation. FL Rule 4-1.7(b) governs other potential conflicts of interest. It prevents a lawyer from undertaking any representation if the lawyer's independent professional judgment will be compromised by duties to another client, to a third party, or to the lawyer's own interests. Again, if the lawyer obtains the first client's consent and has a reasonable belief in the ability to be an effective advocate, FL Rule 4-1.7(b) allows the representation.

The Florida Supreme Court has held that lawyers employed by the State of Florida may collectively bargain with their employer, the state, without violating FL Rule 4-1.7(b), noting that “[t]here is no inherent conflict created by lawyers collectively bargaining with clients.” Chiles v. State Employees Attorneys Guild, 734 So. 2d 1030, 1035 (Fla. 1999). The court held unconstitutional section 447.203(3)(j), Florida Statutes (1997) which prohibits lawyers employed by the state from collectively bargaining with their government employer. The right to bargain collectively is a fundamental right guaranteed by Article 1, section 6 of the Florida Constitution. Therefore, the state may not adopt a blanket ban on collective bargaining by state lawyers without showing a compelling state interest. Id. at 1033. While the state showed a compelling interest in its relationship with its lawyers, the state “failed to demonstrate that its interest in preserving the attorney-client relationship justifies an absolute prohibition against collective bargaining by public sector lawyers.” Id. at 1036.

The court cautioned that “lawyers exercising their constitutional right to bargain collectively may not violate the Rules Regulating the Florida Bar and must give unqualified deference to the traditional duty of loyalty that a lawyer owes to a client.” Id. at 1031. The court emphasized that any lawyer who, as a result of collective bargaining, breaches the duty of loyalty, will be subject to discipline. Id. at 1037. However, the court further noted that “[t]he state presented no evidence to support the position that government employed attorneys would abandon their ethical obligation of confidentiality, fidelity and loyalty by becoming members of a labor organization.” Id. at 1034. Other jurisdictions have allowed state-employed lawyers to unionize “without any apparent harm to the attorney-client relationship.” Id.

Attorneys representing clients with opposing interests will always violate FL Rule 4-1.7(a). See, e.g., Florida Bar v. Marke, 669 So. 2d 247 (Fla. 1996)(attorney suspended for 30 days where he represented a husband and wife in forming a corporation, then became the corporation’s attorney and represented new purchasers of corporation in attempting to fire the husband from a management position); Florida Bar v. Sofo, 673 So. 2d 1 (Fla. 1996)(attorney suspended for 91 days where he was attorney for two corporations and wrote letter on first corporation’s stationery threatening to sue first corporation on behalf of second corporation); Florida Bar v. Joy, 679 So. 2d 1165 (Fla. 1996)(attorney found to engage in conflicting representation where he secretly counseled and provided information to a minority shareholder of his corporate client).

Even potential conflicts of interest will trigger FL Rule 4-1.7, because its purpose is to prevent attorneys from undertaking representations that potentially conflict. Florida Bar v. Cox, 655 So. 2d 1122 (Fla. 1995)(attorney suspended for 30 days for “moonlighting” against firm policy, even absent actual conflict between firm’s clients and attorney’s private clients). The mere appearance of conflict can also violate FL Rule 4-1.7. Florida Bar v. Belleville, 591 So. 2d 170 (Fla. 1991)(attorney who represented client in one-sided real estate transaction with unrepresented party was suspended for 30 days where the attorney’s actions created the appearance he might be acting in both parties’ interests).

The broad intent of FL Rule 4-1.7 is to prevent lawyers from becoming involved in potentially conflicting situations. For example, a lawyer wanted to work for a company that represented clients in securities negotiations and arbitration. The company would find the clients, and pay the lawyer to represent them. This relationship could violate FL Rule 4-1.7(b) simply because the lawyer might at some time have a conflict between the client and the company, which would be paying the lawyer’s fee. FL Eth. Op. 95-2 (July 15, 1995).

1.7:220      Material Adverse Effect on Representation

The thrust of FL Rule 4-1.7(a) & (b) is to ensure that the lawyer does not compromise the duty of loyalty to clients. Comment to FL Rule 4-1.7. Loyalty is "an essential element" of the lawyer-client relationship. The rule presumes that client loyalty will be affected where the lawyer has responsibilities to another client with adverse interests, even if the representation of the second client is wholly unrelated to representation of the first client. FL Rule 4-1.7 is broader than FL Rule 4-1.9, which governs conflicts of interest between current and former clients. FL Rule 4-1.9 prohibits a lawyer from representing a client whose interests are adverse to those of a former client "in a matter substantially related to" the former client's case. FL Rule 4-1.7 prohibits all representation of a new client whose interests are adverse to those of a current client, without regard to whether the adverse interests are related to the current client's case. See Florida Ins. Guar. Ass'n v. Carey Canada, Inc., 749 F. Supp. 255, 260 (S.D. Fla. 1990)(FL Rule 4-1.9 mandates a looser qualification standard than FL Rule 4-1.7).

The rule cannot be applied absent an attorney-client relationship. It is not clear whether an attorney-client relationship requires a formal agreement. In Florida Bar v. Beach, 675 So. 2d 106 (Fla. 1996), an attorney acted as advisor to a paralegal service, which in turn relayed his advice to its clients. The clients knew the attorney was giving legal advice, but had signed agreements indicating that the attorney would not be their lawyer unless they entered into a separate agreement with him. The attorney represented the paralegal service in a dispute with one of the service's clients. The court found no violation of FL Rule 4-1.7(a) because, without a formal attorney-client agreement, the service's client was never the attorney's client. (The attorney was found to have violated FL Rule 4-5.4, sharing a legal fee with a nonlawyer, and FL Rule 4-5.5, assisting in the unauthorized practice of law.) Conveying legal advice alone was not enough to trigger the rule. See also Brennan v. Ruffner, 640 So. 2d 143 (Fla. 4th 1994)(closely-held corporation's attorney, who drafted shareholder agreement, was not shareholder's attorney for purposes of FL Rule 4-1.7(a)).

However, in Florida Bar v. Belleville, 591 So. 2d 170, 172 (Fla. 1991), the court found a conflict without a formal attorney-client agreement. A lawyer represented one party in a one-sided real estate agreement with an unrepresented 83-year-old man. Because it was clear the unrepresented man was relying on the attorney's advice, the attorney should have followed the provisions of FL Rule 4-1.7(a) and explained the conflict to both parties. In Florida Bar v. Flowers, 672 So. 2d 526 (Fla. 1996), the court rejected a lawyer's claim that he did not represent the client, where the client believed she was the lawyer's client though she was actually advised by and paid her fees to an immigration consultant who shared offices with the lawyer.

In Cole v. State, 700 So. 2d 33, 37 (Fla. 5th DCA 1997), the court noted an inherent conflict created when a lawyer agreed to represent a criminal defendant for a flat fee that included all discovery and investigative fees. A conflict necessarily arises because any investigative costs come directly out of the attorney's pocket.

1.7:230      Perspective for Determining Conflict of Interest

A court may raise the issue of conflict of interest in litigation if it infers that the lawyer has neglected the responsibility. Comment, FL Rule 4-1.7. Criminal judges should inquire about conflicts if one lawyer represents multiple defendants. Comment, FL Rule 4-1.7. Where the conflict is such as clearly to call in question the fair or efficient administration of justice, opposing counsel may properly raise the question. Comment FL Rule 4-1.7. However, courts should not allow lawyers to use the issue as a means of harassing the other party. Comment, FL Rule 4-1.7.

Thus, in Zarco Supply Co. v. Bonnell, 658 So. 2d 151 (Fla. 1st DCA 1995), the court allowed counsel for an insurer in a personal injury case to raise the issue of a conflict, where counsel for plaintiffs represented the insured in a medical malpractice action. In Brent v. Smathers, 529 So. 2d 1267 (Fla. 3d DCA 1988), the court allowed an opposing counsel to move to disqualify a law firm representing one trustee of an estate against a second trustee in a breach of fiduciary duty lawsuit, where the law firm had also represented the first trustee. However, in Terry v. State, 668 So. 2d 954 (Fla. 1996), the court dismissed a challenge by one defendant alleging that a codefendant had a conflict of interest with the codefendant’s lawyer, holding that a third party had no standing to raise the issue.

1.7:240      Client Consent to a Conflict of Interest; Non-Consentable Conflicts

The client may waive the conflicts of FL Rule 4-1.7 by consenting after consultation with the lawyer. The consultation must include explanation of the implications of the common representation and the advantages and risks involved. FL Rule 4-1.7(c). Thus, a client's awareness of a conflict and subsequent inaction do not constitute consent. Florida Ins. Guar. Ass'n v. Carey Canada, Inc., 749 F. Supp. 255 (S.D. Fla. 1990). In Carey Canada, a law firm wrote a letter to a client's employee explaining a potential conflict of interest, but failed to detail the nature and scope of the conflict. The court held that the client was not precluded from raising the conflict issue a year later. "Consent can come only after consultation-- which the rule contemplates as full disclosure.... [The lawyer] must explain to them the nature of the conflict of interest in such detail so that they can understand the reasons why it may be desirable for each to [withhold consent]." The client’s failure to object to conflicting representation does not constitute consent. Florida Bar v. Dunagan, 731 So. 2d 1237 (Fla. 1999). It is not the client’s responsibility to raise the issue of the conflict because “consent is primarily the responsibility of the lawyer undertaking the representation.” Comment, FL Rule 4-1.7.

Although the rules do not specifically provide that consent must be obtained before the attorney begins the conflicting representation, consent should be obtained if a conflict exists before the representation begins. Florida Bar v. Dunagan, 731 So. 2d 1237 (Fla. 1999).

Some situations are so fraught with trouble that a lawyer should not even ask for client consent to dual representation. Comment, FL Rule 4-1.7. Client consent cannot cure the conflict in some situations. See, e.g., Zarco Supply Co. v. Bonnell, 658 So. 2d 151 (Fla. 1st DCA 1995)(law firm's representation of wife and children against husband and husband's insurer in personal injury lawsuit was improper where law firm also represented husband in medical malpractice action, despite husband's consent; client consent is insufficient where "the fair administration of justice" is called into question); Florida Bar v. Reed, 644 So. 2d 1355 (Fla. 1994)(lawyer's dual representation of buyer and seller of house was improper despite consent); Florida Bar v. Feige, 596 So. 2d 433 (Fla. 1992)(attorney could not defend client and himself in lawsuit, despite client's consent).

1.7:250      Imputation of Conflict of Interest to Affiliated Lawyers [see 1.10:200]

1.7:260      Sanctions and Remedies for Conflicts of Interest

As the cited cases indicate, sanctions for violation of Rule 4-1.7 include disqualification as counsel in a given case, reprimand, and suspension from the practice of law.

Disqualification

A motion to disqualify should be supported by affidavits or testimony under oath. The opposing party should then be given an opportunity to file affidavits in response. If the affidavits establish conflicting facts, then an evidentiary hearing is necessary. Dawson v. Bram, 491 So. 2d 1275 (Fla. 2d DCA 1986).

One of the purposes of disqualifying a lawyer is to preserve confidence in the judicial system. However, the court must also weigh the interests of the client in being represented by counsel of its choice. "'[I]n every case where a specifically identifiable appearance of impropriety exists the court must weigh the likelihood of public suspicion against the social interests in obtaining counsel of one’s choice.'" Lee v. Gadasa Corp., 714 So. 2d 610, 612 (Fla. 1st DCA 1998) (quoting Cox v. American Cast Iron Pipe Co., 847 F.2d 725, 731 (11th Cir. 1988)). The courts have repeatedly recognized that "disqualification of a party’s chosen counsel is a harsh sanction and 'an extraordinary remedy' which should be resorted to sparingly." City of Apopka v. All Corners, Inc., 701 So. 2d 641, 644 (Fla. 5th DCA 1997) (quoting Esquire Care, Inc. v. Maguire, 532 So. 2d 740, 741 (Fla. 2d DCA 1988)); see also Russakoff v. Dep't of Ins., 724 So. 2d 582, 583 (Fla. 1st DCA 1999) ("Disqualification of a lawyer for conflict of interest is an extraordinary remedy to be resorted to only sparingly."). The Preamble to the Florida Rules of Professional Conduct cautions against using the rules for any purpose other than those for which the Rules were intended:

Furthermore, the purpose of the rules can be subverted when they are invoked by opposing parties as procedural weapons. The fact that a rule is a just basis for a lawyer’s self-assessment, or for disciplinary authority, does not imply that an antagonist in a collateral proceeding or transaction has standing to seek enforcement of the rule.

Preamble, RPC. The Comment to FL Rule 4-1.7 specifically addresses the issue of motions to disqualify and cautions that when a question of conflict of interest is raised by an opposing party it "should be viewed with caution . . . for it can be misused as a technique of harassment." Courts must avoid allowing a litigant to use a disciplinary rule "for the improper purpose of securing an advantage over its opponent by depriving the opponent of its counsel of choice, who is intimately familiar with the litigation, and forcing it either to spend additional funds for new counsel or to concede defeat because of financial inability to retain new counsel."

Lee, 714 So. 2d at 612. But see Contant v. Kawasaki Motors Corp., 826 F. Supp. 427 (M.D. Fla. 1993) (quoting Rentclub Inc. v. Transamerica Rental Fin. Corp., 811 F. Supp. 651 (M.D. Fla. 1992)) ("'even an appearance of impropriety may, under the appropriate circumstances, require prompt remedial action from the court . . . Consequently, any doubt is to be resolved in favor of disqualification.'")

In the Eleventh Circuit a two-pronged test is used in attorney disqualification cases based on conflict of interests:

First, the party moving for disqualification must establish that it, at one time, had an attorney-client relationship with counsel. Second, the moving party does not need to show specific confidences that have been revealed by the former client. The moving party must show that the present and prior representations are substantially related.

Contant v. Kawasaki Motors Corp., 826 F. Supp. 427, 429 (M.D. Fla. 1993) (citations omitted). To prove that a prior representation was substantially related, the party must demonstrate "the relationship between the subject matters, issues and causes of action of both the present and previous representations so that the court can determine whether a substantial relationship exists." Id.

The party seeking disqualification has the burden of proof. Contant v. Kawasaki Motors Corp., 826 F. Supp. 427, 428 (M.D. Fla. 1993); Moyroud v. Itek Corp., 528 F. Supp. 707 (S.D. Fla. 1981); Hilton v. Barnett Banks, Inc., 1994 WL 776971 (M.D. Fla. 1994).

1.7:270      Positional Conflicts

Florida courts have found that any conflict between a lawyer's own interests and those of the client will invoke FL Rule 4-1.7(b). Thus, a lawyer who accepted $5,000 to arrange a television interview for his client in which the client made damaging admissions was suspended for one year for violating FL Rule 4-1.7(b). Florida Bar v. Niles, 644 So. 2d 504 (Fla. 1994). A lawyer who borrowed money from a client and failed to fully explain the transaction was suspended for two months for, among other infractions, allowing his self-interest to compromise his duty of loyalty to his client. Florida Bar v. Black, 602 So. 2d 1298 (Fla. 1992). An attorney was reprimanded for lending a client money, in violation of FL Rule 4-1.7(b). Florida Bar v. Kramer, 593 So. 2d 1040 (Fla. 1992). Courts have disqualified lawyers from representing both themselves and clients as defendants in lawsuits because of FL Rule 4-1.7(b), reasoning that there was a possibility that the co-defendants' interests could conflict. In re Captran Creditors Trust, 104 B.R. 442 (Bankr. M.D. Fla. 1989); Florida Bar v. Feige, 596 So. 2d 433 (Fla. 1992).

Despite the clear language of FL Rule 4-1.7(b) and the Comment that a lawyer should not allow personal interests to compromise the representation of a client, one federal court has held that FL Rule 4-1.7 only applies to conflicts between clients. Davis v. Southern Bell Tel. & Tel. Co., 149 F.R.D. 666 (S.D. Fla. 1993). Lawyers for the telephone company attempted to disqualify lawyers who had contracted with the state of Florida on the ground that the lawyers' contingency fee arrangement with the class action plaintiffs conflicted with their duty to the state to settle the case. In denying the motion, the court found that "Rule 4-1.7(b) addresses conflicts created by duties to clients with inconsistent interests," as opposed to conflicts between a client and a lawyer's self-interest. No other court has reached such a conclusion.

1.7:280      Relationship to Other Rules (e.g., MRs 1.13, 2.2, 5.7, 6.3, 6.4)

[The discussion of this topic has not yet been written.]

1.7:300   Conflict of Interest Among Current Clients (Concurrent Conflicts)

Primary Florida References: FL Rule 4-1.7
Background References: ABA Model Rule 1.7, Other Jurisdictions
Commentary: ABA/BNA §§ 51:101, 51:301, ALI-LGL §§ 128-131, Wolfram §§ 7.1-7.3

[The discussion of this topic has not yet been written.]

1.7:310      Representing Parties with Conflicting Interests in Civil Litigation

[The discussion of this topic has not yet been written.]

1.7:315      Insured-Insurer Conflicts [see also 1.8:720]

[The discussion of this topic has not yet been written.]

1.7:320      Conflicts of Interest in Criminal Litigation

[The discussion of this topic has not yet been written.]

1.7:330      Multiple Representation in Non-Litigated Matters

[The discussion of this topic has not yet been written.]

1.7:340      Conflicts of Interest in Representing Organizations

[The discussion of this topic has not yet been written.]

1.7:400   Conflict of Interest Between Current Client and Third-Party Payor

Primary Florida References: FL Rule 4-1.7
Background References: ABA Model Rule 1.7, Other Jurisdictions
Commentary: ABA/BNA § 51.901, ALI-LGL § 134, Wolfram § 8.8

[The discussion of this topic has not yet been written.]

1.7:410      Insured-Insurer Conflicts [see 1.7:315 and 1.8:720]

[The discussion of this topic has not yet been written.]

1.7:420      Lawyer with Fiduciary Obligations to Third Person [see 1.13:520]

[The discussion of this topic has not yet been written.]

1.7:500   Conflict of Interest Between Current Client and Lawyer's Interest [see also 1.8:200]

Primary Florida References: FL Rule 4-1.7
Background References: ABA Model Rule 1.7, Other Jurisdictions
Commentary: ABA/BNA § 51:501, ALI-LGL §§ 125-127, Wolfram § 8.11

A lawyer cannot represent a client who is suing the lawyer. Florida Bar v. Vining, 721 So. 2d 1164 (Fla. 1998).