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Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.


New Mexico Legal Ethics

1.7 Rule 1.7 Conflict of Interest: General Rule

1.7:100 Comparative Analysis of New Mexico Rule

“A.      Representation involving concurrent conflict of interest.  Except as provided in Paragraph B of this rule, a lawyer shall not represent a client if the representation involves a concurrent conflict of interest.  A concurrent conflict of interest exists if:

            (1)        the representation of one client will be directly adverse to another client; or

            (2)        there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibility to another client, a former client or a third person or by a personal interest of the lawyer.

B.        Permissible representation when concurrent conflict exists.  Notwithstanding the existence of a concurrent conflict of interest under Paragraph A of this rule, a lawyer may represent a client if:

            (1)        the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

            (2)        the representation is not prohibited by law;

(3)        the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and

(4)        each affected client gives informed consent, confirmed in writing.”

 

1.7:101   Model Rule Comparison

Following the 2008 amendments, NMR 16-107 is substantially identical to MR 1.7.  The New Mexico rule also includes the ABA commentary on MR 1.7 as well.

NMR 16-107underwent extensive revisions in the 2008 amendments.  Among other things, the New Mexico rule now follows the Model Rule more closely by proscribing “a concurrent conflict of interest,” rather than representation that “will be directly or substantially adverse to another client” as found in the prior state rule.

 

1.7:102   Model Code Comparison

Like DR 5 105,NMR 16-107 prohibits a lawyer from representing a client in situations where a conflict of interest is present which will adversely affect the representation, unless the client consents and the lawyer reasonably believes that no adverse effect will result.  Client consent under NMR 16-107 must be “informed” and “confirmed in writing.”  See NMR 16-100 (E) & (B). Under the NMR and the MR, in order to obtain “informed consent” the lawyer must propose a “course of conduct” and give “adequate information and explanation about the material risks of and reasonably available alternatives.” DR 5-107(C), in comparison, required “full disclosure of the possible effect of such representation on the exercise of [the lawyer’s] independent professional judgment on behalf of each” client. 

Regarding NMR 16-107(A), see also EC 5-1, EC 5-14, EC 5-15, EC 5-17, EC 5-21, EC 5-22, DR 5-101(A), and DR 5-107(B). Regarding NMR 16-107(B), see also EC 2-21, EC 5-2, EC 5-3, EC 5-9, EC 5-11, EC 5-13, EC 5-14, EC 5-15, EC 5-16, EC 5-17, EC 5-18, EC 5-21, EC 5-22, EC 5-23, DR 5-101, DR 5-102, DR 5-104, DR 5-107, DR 5-106, and DR 7-106.

1.7:200 Conflicts of Interest in General

Paragraph (A) of NMR 16-107 generally prohibits a lawyer from representing a client if such representation “will be directly adverse to another client,” or if “significant risk” exists of a “material limit[ation]” on the representation due to external exigencies.  The 2008 amendments deleted “or substantially adverse” from the formulation, adding clarity to the NMR and consistency with the MR.  The lawyer may still represent a client in the face of direct adversity, however, if the lawyer “reasonably believes” that he or she “will be able to provide competent and diligent representation to each affected client,” and “each affected client gives informed consent, confirmed in writing.” The representation must also not be prohibited by law, or involve competing claims in the same proceeding.

Paragraph (B) of NMR 16-107 prohibits a lawyer from representing a client if that representation will be “materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interests.”  Again, the rule provides an avenue for lawyers to continue representation even in the face of a conflict under the provision.  Under this paragraph, a lawyer may still undertake the representation if “(1) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents after consultation.”  Id. 

NMR 16-107 is based primarily on the lawyer’s professional duty of loyalty to a client, which prohibits undertaking representation directly adverse to that client, or undertaking representation when the lawyer’s other responsibilities or own interests may impair the lawyer in carrying out an appropriate course of action.  See NMR 16-107, Comment.  “The crux of [this rule] . . . is that a lawyer should not represent a client whose interests are adverse to those of a present client.”  United States v. Gallegos, 39 F.3d 276, 279 (10th Cir. 1994).

Comments [1] to [5] and [14] to [34] to NMR 16-107 discuss general principles concerning conflicts, non-consentable conflicts, consent and revoking consent, waivers of future conflicts, litigation and non-litigation conflicts, common representation problems, and organizational clients.

 

1.7:210   Basic Prohibition of Conflict of Interest

In New Mexico, “it is well established . . . that counsel has a duty to avoid a conflict of interest.”  State v. Tammy S. and Jerald F., 126 N.M. 664, 668, 974 P.2d 158, 162 (Ct. App. 1999)NMR 16-107 concerns “concurrent conflicts” between two clients of the lawyer, or between the client and the lawyer.  The New Mexico Supreme Court has stated: “Rule 16 107(A) prohibits a lawyer from representing a client with interests adverse to those of another client unless two criteria are met.  The first criterion is that the lawyer must reasonably believe that the representation will not adversely affect the lawyer’s relationship with the other client.  Only if the first criterion is met is the second criterion - client consent - a factor.”  Matter of Houston, 127 N.M. 582, 584, 985 P.2d 752, 754 (1999).  The consultation preceding consent required by NMR 16-107 must “include explanation of the implications of the common representation and the advantages and risks involved.” 

Under NMR 16-107(B) (now (A)), “a lawyer is prohibited from representing a client if the representation may be materially limited by the lawyer’s own interests or responsibilities to another client or person, unless the same two conditions are met.”  Matter of Sheehan, 130 N.M. 485, 487, 27 P.3d 972, 974 (2001).  If these two conditions are met, the lawyer may continue representation even if there appears to be a conflict under the rule.  Sanders v. Rosenberg, 119 N.M. 811, 813, 896 P.2d 491, 493 (Ct. App. 1995).

The first criterion to be met by a lawyer wishing to continue representation in the face of an apparent conflict - reasonable belief of the lawyer that the continued representation of either client will not be adversely affected - depends on a determination of what “reasonable” means when applied to the conduct of a specific attorney.  In one case, Matter of Houston, the New Mexico Supreme Court looked to the definition of “reasonable belief” found in the Terminology section of the Preamble to the New Mexico Rules of Professional Responsibility.  127 N.M. at 584 85, 985 P.2d at 754 55.  That definition provides that “reasonable belief”, or “reasonably believes”, “when used in reference to a lawyer denotes that the lawyer believes the matter in question and that the circumstances are such that the belief is reasonable.”  See NMR Preamble, Terminology.  In the case, the lawyer was found to be unreasonable in his belief that he could represent the wife in a consent proceeding for divorce, and the husband in a child abuse charge regarding the couple’s daughter.  Matter of Houston, 127 N.M. at 584 85, 985 P.2d at 754 55. The court noted, importantly, that the fact that the client was consulted and did give consent was not even a factor in the case, because the lawyer could not reasonably believe that continued representation in the case was appropriate.  Id.

In considering the conflict of interest issues presented when an insurer, who has retained a lawyer to represent its insured, requires the lawyer to submit his bills to a third party auditor without the consent of the insured, the State Bar of New Mexico Advisory Opinions Committee determined there is a conflict between the interest of the insurer in having the bills submitted to a third party auditor, the interest of the lawyer in getting paid, and the interest of the insured in confidentiality.  State Bar Advisory Opinion 2000-2.  In the face of this conflict, and the potential waiver of the insured’s confidentiality protections by disclosing the legal bills, the Committee stated that a lawyer could “rarely, if ever” reasonably believe that his or her representation of the insured would not be adversely affected by the disclosure requirement.  Id. (also stating that an attorney’s primary duty of loyalty is owed to the insured, even though the attorney is paid by the insurer).

The second criteria - client consent - once had an added layer in New Mexico because former NMR 16-107, in contrast to the 1983 ABA Model Rule, adds a sentence requiring that “the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.”  The courts have indicated that this additional requirement in the New Mexico rule is to be taken seriously.  See Matter of Houston, 127 N.M. at 583, 985 P.2d at 753 (in requesting consent of wife in divorce proceeding to represent husband in criminal sexual abuse charges for alleged abuse of the couple’s daughter, lawyer gave inadequate consultation by failing to tell wife that both she and her daughter could be called to testify on the charges, and failing to discuss other risks of the common representation); Sanders v. Rosenberg, 119 N.M. at 813, 896 P.2d at 493 (client considered lawyer’s responsibilities as step father to client’s children prior to manifesting consent); Garrick v. Weaver, 888 F.2d 687, 691 (10th Cir. 1989) (noting district court’s finding of a violation of NMR 16-107 where attorney discussed conflict with client, but “failed to outline adequately the ramifications of the conflict of interest”) (district court opinion unpublished).  The consent requirement is now incorporated into NMR 16-107(B)(4) and NMR 16-100(E).

As discussed more fully in section 1.7:320 infra, criminal cases in which a conflict is alleged implicate somewhat separate factors, because the constitutional guarantee of effective assistance of counsel includes the right to “effective assistance of counsel free from conflicts of interest.”  State v. Sosa, 123 N.M. 564, 571, 943 P.2d 1017, 1024 (1997).  While the general rules regarding reasonable belief and consent outlined above still apply, ineffective assistance of counsel based on a conflict of interest “requires a showing of an actual conflict of interest rather than the possibility of conflict.”  123 N.M. at 571 72, 943 P.2d at 1024 25; see also State v. Santillanes, 109 N.M. 781, 790 P.2d 1062 (Ct. App. 1990); and State v. Martínez, 130 N.M. 744, 31 P.3d 1018 (Ct. App. 2001).  The right to effective assistance of counsel, and thus the requirement that an actual conflict be shown, also applies to parental termination cases in New Mexico.  State v. Tammy S. and Jerald F., 126 N.M. at 668, 974 P.2d at 162.

See also State Bar Advisory Opinion 1986-4 (multiple representation; funds of decedent’s estate); State Bar Advisory Opinion 1985-8 (representing wife in divorce against husband, and representing another party in case against husband); and State Bar Advisory Opinion 1985-7 (representing state agency and also contracting with agency to serve as hearing officer, decided under former Code of Professional Responsibility). 

 

1.7:220   Material Adverse Effect on Representation

The 2008 amendments eliminated the “material adverse effect on the representation” language that was present in former NMR 16-107, essentially replacing it with the concept stated in NMR 16-107(B)(1) that the lawyer may proceed only if, among other things, he or she “reasonably believes … competent and diligent representation” can be provided to “each affected client.”

The test for determining the existence of an actual conflict is whether counsel actively represented conflicting interests that adversely affected his performance.  State ex rel. Children, Youth & Families Dept. v. Tammy S., 126 N.M. 664, 974 P.2d 158 (1999).

The appellate case law seems to follow the suggestion that a lawyer is materially limited in his or her representation of a client when that lawyer cannot recommend a proper course of action because of the lawyer’s other responsibilities or interests.  In those cases, it is lawyers who are limited by their own interests who have most often been found to have violated the prohibition in NMR 16-107 against undertaking representation that is materially limited by other responsibilities.  For example, in Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989), a lawyer who was in financial distress received a $5000 advance from a client’s father, to be applied to the lawyer’s hourly fees at a rate of $75 per hour.  Contrary to the advice of criminal lawyers associated for purposes of the matter, the lawyer advised his client to fight an extradition.  The Supreme Court ruled that the lawyer violated the rule because he “unnecessarily ‘churned’ [an] extradition matter to generate legal fees.”  Id. at 769, 779 P.2d at 547

The lawyer in Matter of Chávez, 129 N.M. 35, 1 P.2d 417 (2000), was also held to be materially limited by his own interests, in violation of NMR 16-107.  In that case, the lawyer in question committed several acts of misappropriation with regard to his trust account, applying client funds in the account to cover his firm’s expenses.  He also accepted retainers from clients and then failed to represent them on certain matters.  The court found these acts violated NMR 16-107, because they amounted to “representing clients when that representation was materially limited” by the lawyer’s own interests. 

Similarly, Matter of Sheehan, 130 N.M. 485, 27 P.3d 972 (2001), held that a lawyer’s obligation as fiduciary to a trust was materially limited by his own interest in being paid for legal work he had performed for the daughter of the client who established the trust.  In that case, the lawyer, at the client’s direction, paid his own bills out of the funds of the trust.  Under New Mexico law, such an action is prohibited by statute.  130 N.M. at 487, 27 P.3d at 974.   Additionally, as the court held, his interest in being paid for the legal work he performed limited his ability to discharge his duties as trustee, which prohibited him from making the transaction to pay his bill from the fund.

Other cases consider the material limitations caused by a lawyer’s responsibilities to two somewhat conflicted clients.  In one case, Matter of Houston, 127 N.M. 582, 985 P.2d 752 (1999), the lawyer represented a wife in a divorce proceeding, and the husband of the wife on a charge of sexual molestation of the couple’s daughter.  Even though the lawyer knew that the husband had both beaten the wife and sexually assaulted the daughter, he entered a divorce decree on behalf of the wife which included joint custody and unsupervised visitation.  127 N.M. at 584, 985 P.2d at 754.  That decree also provided that all of the dependent tax deductions for the couple’s children would be awarded to the husband, even though the lawyer knew that the wife would be the sole support for the children while the husband was in jail.  Id.  The court ruled that both of these facts established that the lawyer’s representation of the wife was materially limited by his obligations to the husband as his client.  Id.

In a similar case, State v. Tammy S. and Jerald F., 126 N.M. 664, 974 P.2d 158 (Ct. App. 1999), the lawyer represented both the mother and the father in a proceeding by the state to terminate their parental rights.  The basis for the state’s case for termination rested on the domestic violence relationship between the mother and father, and the father’s alcoholism and abuse of the children.  126 N.M. at 669, 974 P.2d at 163.  While the attorney did explain the options available to the mother, there was no evidence that the attorney ever counseled her that she could receive visitation, or perhaps even regain her parental rights, if she terminated her relationship with the father.  126 N.M. at 667, 974 P.2d at 161.  The court held that this advice was not given by the attorney because of the material limitations caused by his representation of the father.  Specifically, the court noted that if the lawyer had counseled the mother on the ramifications of her relationship with the father, it would have damaged the father’s case for gaining access to the child.  126 N.M. at 669, 974 P.2d at 163.  Thus, the lawyer was materially limited in his representation of the mother by his concurrent representation of the father.

An attorney who represented a district attorney in a civil rights action brought by a former employee of a governmental authority was not required to disqualify himself and his law firm, on grounds that another lawyer had recently joined his law firm after having represented the governmental authority in unrelated litigation while the lawyer worked for the governmental authority, absent a showing of an attorney-client relationship with the other attorney or a connection between the current litigation and any former litigation.  McCans v. City of Truth or Consequences, 2020 WL 104550 (10th Cir. 2010) (New Mexico law).

See also State Bar Advisory Opinions 1995-1 (a conflict may arise where the client directs the attorney to accomplish representation through means that conflict with the lawyer’s duties to the court or under the Rules of Professional Conduct). 

Generally speaking, Paragraph (A)(2) of NMR 16-107 governs situations in which there is no direct adversity between two clients of the lawyer, but instead only the possibility that the lawyer’s judgment and actions in representing either or both of the clients will be impaired because of conflicting interests.   

1.7:230            Perspective for Determining Conflict of Interest

In general, New Mexico cases have determined conflicts of interest according to an objective standard.  For example, the New Mexico Supreme Court has stated that “the determination of whether a conflict exists requiring that the Rule 16-107(A) conditions be met prior to proceeding with the representation is an objective standard.”  Matter of Sheehan, 130 N.M. 485, 487, 27 P.2d 972, 974 (2001).  That same court noted that “the fact that an attorney failed to consult with the clients and obtain consent because he or she did not believe the interests were directly or substantially adverse is not a defense to a conflict of interest charge.”  Id. (emphasis added). 

As noted above, and discussed further in section 1.7:320 infra, a charge of conflict of interest as the basis for an ineffective assistance of counsel claim in criminal cases is subject to the higher standard of whether an actual conflict of interest was present, instead of just a potential conflict.  See State v. Santillanes, 109 N.M. at 783, 790 P.2d at 792.  “Counsel has a duty to avoid a conflict of interest,” and in determining whether an actual conflict occurred, the court views “the proceedings as a whole.”  Id.  “The standard [applied] generally is whether counsel exercised the skill of a reasonably competent attorney” in exercising the duty to avoid a conflict of interest.  Id.

Special consideration is given to situations where the allegation of a conflict of interest is raised by the opposing party.  The Comment to NMR 16-107 has noted that “such an objection should be viewed with caution ... because it can be misused as a technique of harassment.”  In Sanders v. Rosenberg, 119 N.M. 811, 813, 896 P.2d 491, 493 (Ct. App. 1995), it was stated that “New Mexico courts should look upon allegations of conflict with skepticism, especially when they are not raised at the onset of litigation or at the time when the lawyer being objected to first enters an appearance in the case.”

A lawyer must be satisfied he can undertake concurrent representation of multiple clients without compromising either representation.  If the lawyer has any doubts he can accomplish this or about whether a disinterested lawyer would believe this can be done, the lawyer should resolve doubts against the dual representation.  State Bar Advisory Opinion 1990-3.

As stated in U.S. v. Gallegos, 39 F.3d 276 (10th Cir. 1994), under New Mexico law, the crux of the disciplinary rules concerning conflicts of interest for attorneys is that a lawyer should not represent a client whose interests are adverse to those of a present client, or whose interests are adverse to those of a former client on a matter that is the same as or substantially related to the previous matter.

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

Following the 2008 amendments, NMR 16-107 tracks MR 1.7 in requiring “informed consent, confirmed in writing” to overcome a “concurrent conflict of interest.”  Also, the addition of Paragraph (B)(3) to NMR 16-107 implies the only non-consentable conflict is where the representation involves “the assertion of a claim by one client against another client represented by the lawyer in the same … proceeding.”

Prior to the 2008 amendments, the additional consultation requirements in New Mexico’s rule required “a lawyer seeking a client’s consent . . . to explain both the advantages and risks of the common representation.”  Matter of Houston, 127 N.M. 582, 583, 985 P.2d 752, 753 (1999).  Rather than simply discussing the conflict with the client, the lawyer must “outline adequately the ramifications of the conflict of interest.”  See Garrick v. Weaver, 888 F.2d 687, 691 (10th Cir. 1989).  Attorneys are not relieved of the enhanced consultation requirements in situations where they do not believe that there is direct and substantial adversity; in any situation where a possible conflict exists, New Mexico courts have indicated that an objective standard applies to whether a lawyer must consult with the client and seek consent.  See Matter of Sheehan, 130 N.M. 485, 487, 27 P.2d 972, 974 (2001). 

Advice regarding consultation and consent is found in State Bar Advisory Opinion 1990-3 (stating consents to conflicts must be based on full and fair disclosure to the client, including advice on all advantages and especially regarding the disadvantages of the proposed course of action).  That opinion considered whether an attorney on contract to defend the state Risk Management Division in civil tort litigation is precluded from representation of private clients in other litigation matters in which the state is a party.  In the opinion, the advisory committee concluded that such representation would not be barred per se by the conflict of interest rules, and that in certain situations the representation would be permissible.  The committee specifically noted, however, that the informed consent of both the state and the private client must be obtained.  With regard to the requirement of consultation, the opinion provided advice for an example case:

the lawyer with the Risk Management contract who wishes to represent the respondent in a neglect matter would have to advise the respondent that the lawyer has a contract with the state in an unrelated matter due to which the respondent might think the lawyer would not give best efforts on behalf of the respondent.  The lawyer may assure respondent that this is not the case and that the lawyer reasonably believes that he can undertake the representation without adverse affect on either client.  However, the lawyer should advise the respondent that it is respondent’s decision whether to consent.

A client’s explicit manifestation of consent should suffice to permit the representation.  See Sanders v. Rosenberg, 119 N.M. 811, 813, 896 P.2d 491, 493 (Ct. App. 1995) (“Mother explicitly manifested her consent to Sanders’ representation after consideration of Sanders’ responsibilities to Mother’s children.  Therefore, it does not appear that any violation . . . occurred.”)

In Matter of Houston, 127 N.M. 582, 985 P.2d 752 (1999), the lawyer represented a wife in a divorce proceeding, and the husband of the wife on a charge of sexual molestation of the couple’s daughter.  The court held that the lawyer was not reasonable in his belief that he could represent both the husband and the wife in any of the proceedings at issue without adverse effects.  127 N.M. at 584, 985 P.2d at 754.  Significantly, the court noted in reaching this holding that “the conflicts could not be waived by the consent of the clients in these circumstances.”  IdSee also State Bar Advisory Opinion 1990-3 (stating a lawyer should not undertake representation even with consent, if he believes he cannot be totally objective, in context of lawyer representation of financial institution in litigation where lawyer’s partner is a director of institution).

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

New Mexico courts have considered the imputation of conflicts of interest under NMR 16-110See section 1.10:200 infra.

1.7:260            Sanctions and Remedies for Conflicts of Interest

The principal remedy for a conflict of interest is to seek the client’s consent, after a consultation that includes an explanation of the implications of the common representation and the advantages and risks involved.  See NMR 16-100(E).  According to Comment [4] to NMR 16-107, a lawyer who encounters a conflict after the representation has commenced ordinarily must withdraw, unless there is “informed consent, confirmed in writing.”   

The New Mexico Supreme Court has imposed a variety of sanctions against lawyers who represent clients amid conflicts of interest, or fail to adequately consult with clients and obtain their consents to conflicts.  Such sanctions have ranged from suspensions, imposition of costs and a requirement to retake the multi-state ethics examination, to complete disbarment.  See, e.g., Matter of Houston, 985 P.2d 752, 127 N.M. 582 (1999) (suspension for 18 months, with the suspension deferred and the attorney placed on supervised probation, was appropriate for attorney who had conflicts of interest in representing husband and wife in a divorce that appeared uncontested, while also representing husband on charges of criminal sexual penetration of the couple’s child and domestic violence against the wife).

The appellate courts have also indicated that they will consider both mitigating and aggravating circumstances.  For example, the court in Matter of Houston, 127 N.M. 582, 586, 985 P.2d 752, 756 (1999), citing ABA Standards for Imposing Lawyer Sanctions, § 9.22(a) (1991), recognized the existence of a prior disciplinary record as an aggravating factor, “especially for offenses of the same nature.”  The court also noted that “repeated instances of the same conduct for which a lawyer previously has been disciplined generally will result in more severe discipline.”  By the same token, the cooperation of the lawyer during the disciplinary process, the length of time the lawyer has been in practice, and the lack of prior discipline are all “appropriate factors to consider in mitigation.”  Matter of Sheehan, 130 N.M. 485, 489, 27 P.3d 972, 976 (2001).

In litigation, the remedy for a conflict of interest normally is disqualification of the attorney.  Thus, although a party has the right to be represented by an attorney of his or her own choosing, that right is not absolute; if a compelling reason exists that supports disqualification of counsel, the court may reject the party’s chosen counsel.  Sanders v. Rosenberg, 122 N.M. 692, 930 P.2d 1144 (1996).  See also United Nuclear Corp. v. General Atomic Co., 96 N.M. 155, 629 P.2d 231 (1980) (a violation of professional ethics does not automatically result in disqualification of counsel).

Several cases discuss the skepticism with which courts should consider allegations of a conflict of interest in the litigation context.  See, e.g., Sanders v. Rosenberg, 122 N.M. 692, 930 P.2d 1144 (1996) (because motions for disqualification of opposing counsel carry with them potential for abuse and harassment, moving party must provide strong showing of necessity of disqualification; thus, while trial court has wide latitude in determining whether to disqualify counsel from participating in given case, discretion is not unlimited, and there must be some identifiable conduct that is improper before motion to disqualify will be sustained); and Matter of Conservatorship and Guardianship of Pulver, 117 N.M. 329, 871 P.2d 985 (Ct. App. 1994) (motion to disqualify opposing counsel should be filed at onset of litigation or with promptness and reasonable diligence once facts upon which motion is based have become known; and stating trial court had discretion, in guardianship proceeding, to deny ward’s motion to disqualify attorney from representing proposed guardian based on fact that attorney represented both ward and proposed guardian in prior guardianship and conservatorship proceeding, where ward did not seek to disqualify attorney until more than a year after he filed initial document on proposed guardian’s behalf).

1.7:270            Positional Conflicts

The courts of New Mexico do not appear to have considered this issue in a published opinion.  Comment [24] to NMR 16-107 addresses positional conflicts, and adopts a “material limit[ation]” standard. 

According to State Bar Advisory Opinion 1990-3, some members of a firm may not represent respondents in neglect cases while others in the firm are guardians ad litem for children in other neglect cases, where they appear in the same trial or appellate court and they take different positions on what constitutes neglect sufficient to remove the children from the home.  However, if the representations occur in different courts or if the issues are not related, the concurrent representations would be acceptable with the consent of the clients.

 

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

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

See sections 1.7:200 to 1.7:270 infra., and Comment [6] to NMR 16-107.

In addition, the State Bar of New Mexico Advisory Opinions Committee has determined that a lawyer may defend the State of New Mexico in civil tort claims and concurrently represent private clients in unrelated matters against another agency of the state, if all clients consent following consultation.  During the consultation, the lawyer should indicate the client might think the lawyer would not give his best effort, but the lawyer can assure the client this is not the case and the concurrent representation can occur without adverse effect on either client.  State Bar Advisory Opinion 1990-3.  In addition, a lawyer may represent the Navajo Nation on a business enterprise matter and concurrently accept appointments to represent criminal defendants in tribal court.  Id

It is not a conflict for a lawyer for a municipality to advise the management of the city regarding a personnel matter, and also to represent management at a hearing before the municipality personnel board; however, it may be wise for the lawyer to advise the municipality to have outside counsel representing the municipality at the hearing.  State Bar Advisory Opinion 1990-1. 

Where a lawyer represents a second client in litigation, and also represents a first client in unrelated matters, difficulties may arise between the two clients, and the lawyer should continue representation of the client who was first to hire the lawyer, and should withdraw from representing the other client.  State Bar Advisory Opinion 1986-9.  See also State Bar Advisory Opinion 1986-4 (discussing multiple representation relating to funds of decedent’s estate).

1.7:310            Representing Parties with Conflicting Interests in Civil Litigation

See sections 1.7:200 to 1.7:300 infra.

As noted above, NMR 16-107 establishes the general prohibition against the representation of concurrent clients with conflicting interests, unless certain conditions are met.  This rule provides the general framework for assessing the possibility for conflict between contemporaneous clients, and the means by which those conflicts can be remedied. 

Comment [23] to NMR 16-107 states that a “conflict may exist by reason of substantial discrepancy in the parties’ testimony, incompatibility in positions in relation to an opposing party or the fact that there are substantially different possibilities of settlement of the claims or liabilities in question.” 

In Matter of Houston, 127 N.M. 582, 985 P.2d 752 (1999), the lawyer was retained by a wife to represent her in a divorce proceeding wherein the interests of the spouses were adverse.  While the wife believed that the lawyer was representing her alone, the lawyer himself testified at the hearing that he was representing both parties.  After the divorce hearing, the wife filed domestic violence charges against the husband upon the advice of the lawyer.  The lawyer then proceeded to represent the husband in the criminal case, with the consent of the wife.  In finding multiple conflicts of interest, the court first noted that the lawyer failed to satisfy the consent requirement of NMR 16-107 because he did not inform the wife that she and her daughter would be called to testify in the criminal proceeding, and because he failed to inform them of any of the other risks associated with the common representation.  Also, by filing a divorce decree providing the husband with joint custody and unsupervised visitation, the lawyer “clearly protected husband’s interests to the disadvantage of . . . the wife, by entering [the] decree . . . . knowing husband had beaten wife and sexually abused his daughter.”  127 N.M. at 584, 985 P.2d at 754.  This fact, plus his failure to provide dependent tax deductions to the wife for supporting the children during the husband’s jail sentence, and instead providing the dependent tax deductions to the husband, were both evidence of the material limitations effected by the multiple representation.  As a result, the lawyer was held to have violated NMR 16-107.

See also State Bar Advisory Opinion 1985-11 (discussing representation of employer in worker’s compensation claim, and in tort action by third party hurt in incident out of which worker’s compensation claim arises). 

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

In State Bar Advisory Opinion 2000-2, the rule that an attorney’s primary duty of loyalty is owed to the insured, even though the attorney is paid by the insurer, was confirmed.  The Committee considered whether a lawyer who is retained by an insurer to defend an insured may submit legal bills for such representation to a third party auditor, without the informed consent of the insured.  This requirement is often part of insurers’ billing guidelines.  The Committee answered that “[a]bsent informed consent of the insured client,” the bills may not be disclosed to the third party auditor.  In addition, the Committee determined that it may be an impermissible conflict for defense counsel to seek and obtain the consent of the insured to disclose the lawyer’s bills to third party auditors, because this could be viewed as favoring the interests of the insurer over those of the insured.  As stated by the Committee, “the insurer’s interest in having the defense bills submitted to a third party auditor, and the lawyer’s interest in getting paid, are facially in conflict with the insured’s interests in maintaining confidentiality and a strong legal defense.”  As a result of this conflict, the representation could only continue if the two conditions of NMR 16-107 (reasonable belief of the lawyer that no adverse effects will result, and informed consent of the client) were met.  The Committee noted that informed consent can almost never be sought by the lawyer under this rule, because “the first condition rarely, if ever, can be satisfied in this context.”

Another disqualification arose in Prosecution for the Murder of Prison Guard Ralph Garcia; Conflict of Interest for District Attorney and his Entire Staff, 05-01 Op. Att’y Gen. Jan. 14, 2005.  This Opinion of the Attorney General states that the integrity of the criminal justice system and proper respect for a defendant’s right to due process and a fair trial demand that the newly elected District Attorney be disqualified from participation in the prosecution of a case against a criminal defendant who the District Attorney represented in earlier proceedings of the same case before being elected to public office.  Additionally, these considerations also require the disqualification of the entire prosecutor’s office given the District Attorney’s role as supervisor and employer of the deputies, assistants, and investigators who might otherwise proceed in the case.

1.7:320            Conflicts of Interest in Criminal Litigation

The Comment to NMR 16-107 states that “the potential for conflict of interest in representing multiple defendants in a criminal case is so grave that ordinarily a lawyer should decline to represent more than one codefendant.”  New Mexico appellate courts have considered conflicts of interest in the criminal context on several occasions.  For the most part, conflict of interest issues in this area focus on the right of an accused to counsel, derived from the Sixth Amendment.  The New Mexico Supreme Court has consistently recognized that this guarantee includes a right to representation in which counsel’s professional judgment is not impaired by a conflict of interest.  See, e.g., State v. Sosa, 123 N.M. 564, 943 P.2d 1017 (1997); Churchman v. Dorsey, 122 N.M. 11, 919 P.2d 1076 (1996); State v. Santillanes, 109 N.M. 781, 790 P.2d 1062 (1990)

A claim of ineffective assistance of counsel under the Sixth Amendment due to a conflict of interest requires that the client show an actual conflict of interest, and not simply the possibility of a conflict.  State v. Sosa, 123 N.M. at 571 72, 943 P.2d at 1024 25; Churchman v. Dorsey, 122 N.M. at 13, 919 P.2d at 1078.  The court, when evaluating whether an actual conflict was present, will “assess whether the defense counsel actively represented conflicting interests.”  State v. Sosa, 123 N.M. at 57, 943 P.2d at 1025; Churchman v. Dorsey, 122 N.M. at 14, 919 P.2d at 1079.  The active representation of those conflicting interests, in turn, must adversely affect the attorney’s performance.  State v. Santillanes, 109 N.M. at 783, 790 P.2d at 1064.  The adverse effect is often analyzed in terms of whether the lawyer was precluded by the conflicting representations (and not for another strategic reason) from pursuing a defense that might have been helpful to the defendant.  Id.; Churchman v. Dorsey, 122 N.M. at 14, 919 P.2d at 1079.  Once an actual conflict is determined to exist, prejudice to the defendant is presumed, and “Counsel’s representation becomes unconstitutional in a manner that ‘is never harmless error.’”  State v. Martínez, 130 N.M. 744, 749, 31 P.3d 1018, 1023 (Ct. App. 2001).

In State v. Sosa, 123 N.M. at 571, 943 P.2d at 1074, the lawyer was appointed to represent two co defendants in a criminal matter.  One of the co defendants pled guilty to a lesser charge, while the other co defendant was convicted.  On appeal, the convicted co defendant argued that the lawyer provided ineffective assistance because he failed to investigate, or seek testimony, regarding the other co defendant’s role in the convicted co defendant’s life.  He argued that such testimony would have helped establish a defense, because it would have shown that the other co defendant had pressured him into getting involved in gang activity, and that the lawyer did not seek the testimony because it would have adversely impacted the other co defendant’s chances for obtaining a plea agreement.  The court held that no actual conflict resulting in ineffective assistance of counsel existed in the case, because the convicted co defendant did not establish that the lawyer was forced to abandon any defenses in obtaining a plea agreement for the other co defendant.  The court concluded that no “clear” conflict of interest was presented, and that the alleged conflict was insufficient to establish the required actual conflict of interest.  123 N.M. at 572, 943 P.2d at 1074.

In Churchman v. Dorsey, 122 N.M. 11, 919 P.2d 1076 (1999), the Supreme Court of New Mexico stated that while “representation of two defendants by the same attorney is not per se a violation of constitutional guarantees of effective counsel[,]” where the two co defendants’ interests are in actual conflict, effective assistance of counsel is denied.  122 N.M. at 14, 919 P.2d at 1079, citing State v. Hernandez, 100 N.M. 501, 503, 672 P.2d 1132, 1134 (1983).  The court concluded that there was no denial of the right to effective assistance of counsel because the attorneys at issue were able to pursue both defendants’ defenses “diligently and without any actual conflict.”

Conflicts in criminal representation may also occur when the attorney’s own interest in avoiding implication in a crime, interferes with his representation of a client regarding the same crime.  In State v. Martínez, 130 N.M. 744, 31 P.3d 1018 (Ct. App. 2001), the evidence “strongly suggested that someone associated with defense counsel’s firm may have been present during the killing,” and the defense counsel’s own automobile was at the crime scene.  The court concluded that because this evidence could lead a juror to reasonably make a connection between the defense counsel and the crime, the defense counsel had an actual conflict of interest.  The court reasoned that the attorney was not in a position to give unbiased advice to the client regarding whether he should testify, plead guilty, or cooperate with authorities, because any of those courses of action “could unearth evidence against the attorney.”  Thus, the lawyer had a conflict of interest concerning which he had not sought consent from the client.  130 N.M. at 750 51, 31 P.3d at 1024 25.

A conflict of interest does not necessarily equate to ineffective assistance of counsel.  State v. Joanna, 2004-NMSC-024, 136 N.M. 40, 94 P.3d 783.  There, the Supreme Court affirmed a decision to deny a child’s motion to set aside her criminal plea agreement when the child claimed she entered the plea as a result of ineffective assistance counsel.  The basis for the child’s ineffective assistance claim was the fact that her defense attorney had previously also served as her guardian ad litem.  The court explained the role of a guardian ad litem requires the attorney to assume an objective posture in evaluating the child’s circumstances and to identify and strenuously advocate for what the guardian ad litem concludes are the best interests of the child.  When acting as a defense attorney, on the other hand, counsel must adopt the child’s viewpoint and zealously represent the wishes of the child regardless of whether counsel agrees that those wishes represent the child’s best interest.  The potential conflict which may arise when the two roles are performed simultaneously can be particularly deleterious to children.  Nevertheless, the conflict in a case of common representation is potential, not inherent, and the child has the burden to demonstrate prejudice sufficient to warrant a finding of ineffective assistance of counsel.  In this case, the child presented no evidence showing the attorney’s representation was compromised by an actual, active conflict of interest, and therefore, the child’s motion was properly denied.

Demonstrating a conflict of interest relating to ineffective assistance of counsel may be waived, the Supreme Court in Morales v. Bridgforth, 2004-NMSC-034, 136 N.M. 511, 100 P.3d 668, reviewed the habeas petition of an inmate and other similarly situated individuals seeking the allowance of a separate conflict division of the Public Defender’s Department to represent individuals in post conviction proceedings.  The Court held that a potential conflict of interest arises when a defendant is represented by a Public Defender in post-conviction proceedings alleging the defendant was prejudiced by the ineffective assistance of counsel by another Public Defender.   The Court found a defendant may waive the potential conflict of interest and receive assistance by a Public Defender as long as the waiver conforms with the following requirements: The waiver, based on NMR 16-107, should contain: 1) a statement by counsel that he or she reasonably believes that the representation will not be adversely affected by any potential conflict of interest, and 2) a statement from the client saying that he or she consents to the representation after consultation about the risks involved in such representation.  During consultation the client should be told: 1) the nature of the conflict; 2) the risks involved in such representation; 3) that the client has the statutory right to a conflict-free representation; 4) that if the client decides not to waive the conflict, independent counsel will be obtained to represent him or her. Finally, the client should be given a reasonable amount of time to consider the risks involved before waiving the statutory right to counsel.

Prosecutors have a duty to disclose, earlier rather than later, potential conflicts of interest.  Rael v. Blair, 2007-NMSC-006, 141 N.M. 232, 153 P.3d 657.  The Supreme Court reviewed an appeal from a district court decision denying criminal defendant’s habeas corpus petition.  The Defendant argued he was denied effective assistance of counsel during his trial because his attorney had a conflict of interest because the attorney also represented a State witness contemporaneously in proceedings relevant to the trial.  The Court agreed with the Defendant and granted a new trial. 

In State v. Robinson, 2008-NMCA-036, 143 N.M. 646, 179 P.3d 1254, the Court of Appeals reversed a district court order disqualifying a criminal defendant’s prosecuting attorney.  Before the defendant could be retried for criminal charges following a hung jury, he was indicted for solicitation to murder the attorneys who prosecuted his original trial.  The Defendant argued continued prosecution by the attorneys violated NMR 16-107.  The court held a prosecutor’s personal, business, professional or other attorney-client relationship with the accused may constitute grounds for disqualification but in this case, and as a matter of policy, a defendant does not create a disqualifying interest and cannot choose his or her prosecutor for the underlying offense by the use of threats.

1.7:330            Multiple Representation in Non Litigated Matters

Comments [7], [8] and [26] to [28] to NMR 16-107 deal with conflicts of interest in contexts other than litigation.

In one example case, the New Mexico Supreme Court considered conflicts of interest between contemporaneous clients in non litigated matters.  In Matter of Sheehan, 130 N.M. 485, 27 P.2d 972 (2001), the lawyer served a client in many capacities as her health declined, including managing her finances and establishing an irrevocable trust for the benefit of her grandchildren.  While acting as trustee, the lawyer also undertook the representation of the client’s daughters, including the extensive representation of one daughter in the formation of a cattle company.  Such representation was undertaken at the insistence of the client.  When the daughters’ cattle company could not pay its legal fees, the lawyer withdrew funds from the trust established for the grandchildren, including one of the daughter’s son, in order to pay the fees.  According to the Supreme Court, not only did these actions violate NMR 16-115, but they also represented a concurrent conflict of interest under NMR 16-107, because “the discharge of [the lawyer’s] fiduciary duties to the trust was limited by his own interest in being paid for the substantial legal work he had done for the daughter’s cattle company, as well as by his loyalty and obedience to his client’s directives.”  130 N.M. at 487 88, 27 P.2d at 974 75.

In another case, Matter of Benavidez, 107 N.M. 520, 760 P.2d 1286 (1988), the lawyer in question was retained by the client to defend her against a debt collection suit.  Before the litigation commenced, however, the lawyer introduced the client to a potential purchaser of a portion of the property at issue in the debt collection matter, to help satisfy some of that debt.  The lawyer and the potential purchaser had an ongoing attorney client relationship, and the lawyer never informed the client of this relationship.  The lawyer arranged a purchase between the two clients, but did not account for all of the money he received from the purchaser.  This conduct was found to be in violation of several rules, including NMR 16-107

1.7:340            Conflicts of Interest in Representing Organizations

Comments [34] and [35] to NMR 16-107 discuss the potential conflicts that may arise when a lawyer represents a corporation.  Specifically, conflicts can arise when the lawyer for a corporation or similar organization is also a member of that organization’s board of directors, because the lawyer may be called upon to advise the corporation as to actions of its directors.  In assessing such a relationship, the lawyer should consider several factors: “the frequency with which such situations may arise, the potential intensity of the conflict, the effect of the lawyer’s resignation from the board and the possibility of the corporation’s obtaining legal advice from another lawyer in such situations.”  According to the Comment, if there is a “material risk” that serving in both roles will “compromise the lawyer’s independence of professional judgment,” the lawyer should refrain from serving on the board of directors.  The danger in representing organizations is that the larger the organization is, the more potential there is that the lawyer for that organization will represent another client adverse to the organization. 

In State Bar Advisory Opinion 1990-3, the Committee considered whether an attorney on contract to defend the state Risk Management Division in civil tort litigation is precluded from representing private clients in other litigation matters in which the state is a party.  The Committee concluded that such representation would not be barred per se by the conflict of interest rules, and that in certain situations the representation would be permissible.  Citing the example from the Comment noted above, the Committee said “in the situations where the lawyer is on contract to a governmental entity as to a particular matter, that lawyer could represent clients in suits against the entity on totally unrelated matters.”  Thus, a lawyer generally should be permitted to represent a client in a matter that is adverse to a state agency, provided the agency is distinct from the agency he is representing.

 

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

According to Comment [13] to NMR 16-107, a “lawyer may be paid from a source other than the client … if the client is informed of that fact and consents and the arrangement does not compromise the lawyer’s duty of loyalty or independent judgment to the client.”  One example of this is the insurer insured arrangement; see section 1.7:315 supra

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

See sections 1.7:315 and 1.8:720.

1.7:420            Lawyer with Fiduciary Obligation to Third Person

Matter of Sheehan, 130 N.M. 485, 27 P.3d 972 (2001), is one example of the New Mexico Supreme Court’s approach. In the case, the lawyer served a client in many capacities as her health declined, including managing her finances and establishing an irrevocable trust for the benefit of her grandchildren.  While acting as trustee, the lawyer also undertook the representation of the client’s daughters, including the extensive representation of one daughter in the formation of a cattle company.  Such representation was undertaken at the insistence of the client.  When the daughter’s cattle company could not pay its legal fees, the lawyer withdrew funds from the trust (established for the grandchildren, including the daughter’s son) to pay the fees.  According to the Supreme Court, not only did these actions violate NMR 16-115, but they also represented a concurrent conflict of interest under NMR 16-107, because “the discharge of [the lawyer’s] fiduciary duties to the trust was limited by his own interest in being paid for the substantial legal work he had done for the daughter’s cattle company, as well as by his loyalty and obedience to his client’s directives.”  Matter of Sheehan, 130 N.M. at 488, 27 P.3d at 975.

 

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

A “lawyer’s own interests should not be permitted to have an adverse effect on representation of a client.”  NMR 16-107, Comment [10]; see also NMR 16-107  Comments [8] to [12] (discussing various material limitation conflicts of interest).  Several New Mexico sources concern the relationship between the lawyer’s own financial interest and representation of a client.  For example, in Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989), a lawyer who was in financial distress received a $5000 advance from a client’s father, to be applied to the lawyer’s hourly fees at a rate of $75 per hour.  Contrary to the advice of criminal lawyers associated for purposes of the matter, the lawyer advised his client to fight extradition.  The Supreme Court ruled that the lawyer violated the rule because he “unnecessarily ‘churned’ [an] extradition matter to generate legal fees.”  108 N.M. at 769, 779 P.2d at 547.  Similarly, in State Bar Advisory Opinion 2000-2, the Committee addressed the conflicts presented to a lawyer when an insurer who retains the lawyer to represent an insured, requires the lawyer to submit his bills to a third party auditor without the consent of the insured.  The Committee determined there is a conflict between the interests of the insurer in having the bills submitted to a third party auditor, the interests of the lawyer in getting paid, and the interest of the insured in confidentiality. 

See also Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989) (charging an unreasonable fee, “churning” to generate legal fees, representing a client in a matter materially limited by one’s own financial interest, using information gathered by representation of client to the disadvantage of client, failing to keep client funds in separate account, failing to deliver client’s funds, and failing to render a full accounting, justify a public censure and 30 day suspension); State Bar Advisory Opinion 1988-10 (it is not a conflict for a lawyer to seek a fee from a worker’s compensation award obtained for a client, even where the client does not consent to the fee, provided the representation to obtain the award is completed); and State Bar Advisory Opinion 1990-3 (whether a lawyer may represent a financial institution in litigation while his partner sits on the board of the institution, depends on whether the responsibilities of the two roles may conflict, as they will if board decisions affect the amount of business with the lawyer’s firm). 

The lawyer’s own interest can also be to avoid criminal charges.  For example, in State v. Martínez, 130 N.M. 744, 31 P.3d 1018 (Ct. App. 2001), the evidence “strongly suggested that someone associated with the defense counsel’s firm may have been present during the killing,” and the defense counsel’s own automobile was at the crime scene.  130 N.M. at 750, 31 P.3d at 1024.  The court concluded that because this evidence could lead a juror to reasonably make a connection between the defense counsel and the crime, the defense counsel had an actual conflict of interest.  The court reasoned that the attorney was not in a position to give unbiased advice to the client regarding whether he should testify, plead guilty, or cooperate with authorities, because any of those courses of action “could unearth evidence against the attorney.”

The personal familial interests of a lawyer can also create conflict of interest problems.  In Sanders v. Rosenberg, 119 N.M. 811, 896 P.2d 491 (Ct. App. 1995), the mother in a divorce and child custody proceeding married Sanders, the lawyer representing her.  The father argued that Sanders’ responsibilities to the children, as stepfather, created a conflict of interest.  The court implicitly noted a possible conflict, but held that no conflict was present because Sanders reasonably believed that his responsibilities to the children would not affect his representation of the mother; further, the mother explicitly consented to the representation after considering Sanders’ responsibilities.