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Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.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

1.13   Rule 1.13 Organization as Client

1.13:100   Comparative Analysis of Florida Rule

Primary Florida References: Fl Rule 4-1.13
Background References: ABA Model Rule 1.13, Other Jurisdictions
Commentary:

1.13:101      Model Rule Comparison

Except for stylistic changes, the Florida Rule is identical to MR 1.13. The Florida Rule comment adds a paragraph to clarify that a lawyer who represents or has represented a corporation or other organization is not presumed to also represent an organization (such as a corporate parent or subsidiary) that is affiliated with the client, and is not ethically precluded from accepting representations adverse to affiliates of an existing or former client. The comment recognizes exceptions to this rule, such as when the affiliate is actually the alter ego of the organizational client, or where the client has revealed confidential information to the lawyer with the reasonable expectation that it would not be used adversely to the client's affiliate.

1.13:102      Model Code Comparison

FL Rule 4-1.13 has no counterpart in the Model Code, except the aspirational goals stated in EC 5-18.

1.13:200   Entity as Client

Primary Florida References: Fl Rule 4-1.13
Background References: ABA Model Rule 1.13(a), Other Jurisdictions
Commentary: ABA/BNA 91:2001, ALI-LGL 96, 97, Wolfram 8.3

The Comment to the Florida Rules contains a provision not included in the Model Rules:

Consistent with the principle expressed in subdivision (a) of this rule, an attorney or law firm who represents or has represented a corporation (or other organization) ordinarily is not presumed to also represent, solely by virtue of representing or having represented the client, an organization (such as a corporate parent or subsidiary) that is affiliated with the client.

Comment, FL Rule 4-1.13. The Comment then proceeds to recognize two exceptions to this general rule:

There are exceptions to this general proposition, such as, for example, when an affiliate actually is the alter ego of the organizational client or when the client has revealed confidential information to an attorney with the reasonable expectation that the information would not be used adversely to the client's affiliate(s). Absent such an exception, an attorney or law firm is not ethically precluded from undertaking representations adverse to affiliates of an existing or former client.

Comment, FL Rule 4-1.13. In Hilton v. Barnett Banks Inc., 1994 WL 776971 (M.D. Fla. 1994), the court stated that Rule 4-1.13 does not preclude a lawyer from undertaking representation adverse to an affiliate of a former or current client.

The Northern District of Florida varied the "alter ego rule" somewhat in Jones v. Beverly Health & Rehab. Servs., 68 F. Supp. 2d 1304 (N.D. Fla. 1999) in which the court stated that "[w]here a parent corporation . . . supervises litigation and has the right to steer such litigation of its subsidiaries, the attorney is deemed to represent the entire organization and not just the named entity," even though the parent and its subsidiaries may not be considered alter egos for liability purposes. Id. at 1310, 1310 n. 5.

Shareholders in a closely held corporation:

[W]here an attorney represents a closely held corporation, the attorney is not in privity with and therefore owes no separate duty of diligence and care to an individual shareholder absent special circumstances or an agreement to also represent the shareholder individually. While there is no specific ethical prohibition in Florida against dual representation of the corporation and the shareholder if the attorney is convinced that a conflict does not exist, an attorney representing a corporation does not become the attorney for the individual stockholders merely because the attorney's actions on behalf of the corporation may also benefit the stockholders. The duty of an attorney for the corporation is first and foremost to the corporation, even though legal advice rendered to the corporation may affect the shareholders.

Brennan v. Ruffner, 640 So. 2d 143, 145-46 (Fla. 4th DCA 1994).

1.13:210      Lawyer with Fiduciary Obligation to Third Person

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

1.13:220      Lawyer Serving as Officer or Director of an Organization

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

1.13:230      Divers Kinds of Entities as Organizations

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

1.13:300   Preventing Injury to an Entity Client

Primary Florida References: Fl Rule 4-1.13(b) & (c)
Background References: ABA Model Rule 1.13(b) & (c), Other Jurisdictions
Commentary: ABA/BNA 91:2001, ALI-LGL 96, Wolfram 13.7

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

1.13:310      Resignation Versus Disclosure Outside the Organization

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

1.13:400   Fairness to Non-Client Constituents Within an Entity Client

Primary Florida References: Fl Rule 4-1.13(d)
Background References: ABA Model Rule 1.13(d), Other Jurisdictions
Commentary: ABA/BNA 91:2001, ALI-LGL 103, Wolfram 13.7.5

In Ocean Club Condo. Ass'n v. Estate of Daly, 504 So. 2d 1377 (Fla. 4th DCA 1987), the court held that it was proper for an attorney to represent a condominium association in a wrongful death and negligence lawsuit filed by the owners of one unit in the condominium. The court found the attorney represented the corporate entity, not its individual members, and so could undertake the defense even though it placed the association in litigation against one of its members. The court noted that if the rule were otherwise, such an association could never retain counsel in this kind of case.

In Brennan v. Ruffner, 640 So. 2d 143 (Fla. 4th DCA 1994), a shareholder of a closely held corporation filed a malpractice action against an attorney who represented the corporation and who drafted its shareholder agreement. Among the allegations was that the attorney had a conflict of interest. The court held the attorney did not have a conflict of interest because there was no separate agreement to represent the shareholder. An attorney for a corporation does not become the attorney for shareholders merely because his actions affect the shareholders unless there is a separate, private attorney-client agreement. In Florida Bar v. Nesmith, 642 So. 2d 1357 (Fla. 1994), an attorney was found not to have violated FL Rule 4-1.8(a) restricting entering into a business relationship with a client because the corporation's majority shareholder loaned money to the attorney in his personal rather than his corporate capacity. The court did not expressly address FL Rule 4-1.13, but it implicitly dealt with that rule's provision that the officers, shareholders, directors and employees of a corporation are not necessarily a corporate attorney's clients.

1.13:500   Joint Representation of Entity and Individual Constituents

Primary Florida References: Fl Rule 4-1.13(e)
Background References: ABA Model Rule 1.13(e), Other Jurisdictions
Commentary: ABA/BNA 91:2601, ALI-LGL 131, Wolfram 13.7

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

1.13:510      Corporate Counsel's Role in Shareholder Derivative Actions

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

1.13:520      Representing Client with Fiduciary Duties

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

1.13:530      Representing Government Client

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