Ethics in Brief

Ethics in Brief is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association for SDCBA members.

Attorneys May be Disqualified From Representation Even When Both Former Clients Are Deceased

In 1992, Attorney represented husband and wife, Willet & Betty, in preparing will establishing a marital trust that was expected to generate several million dollars in annual income.  After Willet died, Betty revoked the will that Attorney had prepared and drafted a new instrument transferring the large majority of her assets to a trust that was to benefit her daughter.

Following Betty's death in 2011, a dispute arose between her personal representative—Fiduciary Trust International of California—and the marital trust trustees regarding whether the terms of  Willet’s will required the trust to pay approximately $27 million in estate and inheritance taxes that were due on wife’s assets.  Attorney represented the marital trust in the litigation.   The trial court denied the Fiduciary Trust’s motion to disqualify Attorney based on his previous joint representation of Willet and Betty.

The appellate court in Fiduciary Trust Internat. of California v. Superior Court (2013) 218 Cal. App. 4th 465 confirmed a disqualifying interest generally arises under Rules of Professional Conduct, rule 3-310(E) in two situations: “(1) in cases of successive representation, where an attorney seeks to represent a client with interests that are potentially adverse to a former client of the attorney; and (2) in cases of simultaneous representation, where an attorney seeks to represent in a single action multiple parties with potentially adverse interests.” (Flatt v. Superior Court (1994) 9 Cal.4th 275, 283.)

Because this matter involved “successive representation”, the court determined whether a “substantial relationship” existed between the representations.   If the relationship was substantial, “access to confidential information by the attorney in the course of the first representation (relevant, by definition, to the second representation) is presumed and disqualification of the attorney's representation of the second client is mandatory.” (Flatt, supra, 9 Cal.4th at p. 283.)   A substantial relationship “exists whenever the ‘subjects’ of the prior and the current representations are linked in some rational manner.” (Knight v. Ferguson (2007) 149 Cal.App.4th 1207, 1213.)

The court reversed the denial of disqualification because attorney “initially represented both Betty and Willet regarding their estate plans. In that role, Sandler drafted Willet's and Betty's wills and had communications with them regarding these instruments. It is rational to conclude that, during the course of the representation,” the Attorney “would have explained to Betty the meaning and effect of the significant terms of the wills” therefore, the “former representation of Betty and its current representation of the Marital Trust are not only substantially related but involve the same subject matter: the intended meaning of the provision delineating the payment of estate taxes.”  (Fiduciary Trust, supra, 218 Cal. App. 4th at p.  480.)

Therefore, while attorney “initially represented both Betty and Willet, they have now chosen to continue to represent only Willet, through the Marital Trust, taking a position adverse to Betty.”   (Ibid.) Because of the adverse position, the court rejected the contention that under Evidence Code section 962, communications made by parties united in a common interest to their joint or common counsel, while privileged against strangers, are not privileged as between such parties nor as between their counsel and any of them, when later they assume adverse positions.  (Id. at pp. 483.)

--Andrew A. Servais

**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**