III. Conflicts Of Interests & The Duty Of Loyalty

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III. Conflicts Of Interests & The Duty Of Loyalty

Quiz for Section III: Conflicts of Interests & the Duty of Loyalty


Questions and Answers
  • 1. 
    While an assistant district attorney, Attorney Alpha was in charge of the presentation before a grand jury of evidence that led to an indictment charging thirty-two defendants with conspiracy to sell controlled drugs. Shortly after the grand jury returned the indictments, Alpha resigned as assistant district attorney and became an associate in the law office of Attorney Beta, a sole practitioner. At the time of such association, Beta was the attorney for Deft, one of the indicted co-defendants. Is it proper for Attorney Beta to continue to represent Deft?
    • A. 

      Yes, if Alpha does not reveal to Beta any confidence or secret learned while an assistant district attorney.

    • B. 

      Yes, because a public prosecutor must make timely disclosure to the defense attorney of any exculpatory evidence.

    • C. 

      No, unless Alpha agrees not to participate in the representation of Deft.

    • D. 

      No, because Alpha had substantial responsibility for the indictment of Deft.

  • 2. 
    Attorney was formerly employed by Insurance Company as a lawyer solely to handle fire insurance claims. While so employed she investigated a fire loss claim of Claimant against Insurance Company. Attorney is now in private practice. Assume the claim has not been settled and Claimant consults Attorney and asks Attorney either to represent him or refer him to another lawyer for suit on the claim. Which of the following would be proper for Attorney to do? I. Refuse to discuss the matter with Claimant. II. Represent Claimant. III. Refer Claimant to an associate in her law firm, provided Attorney does not share in any fee. IV. Give Claimant a list of lawyers who Attorney knows are competent and specialize in such claims.
    • A. 

      I only

    • B. 

      I and II, but not III or IV

    • C. 

      I and III, but not II or IV

    • D. 

      I and IV, but not II or III

  • 3. 
    Attorney was formerly employed by Insurance Company as a lawyer solely to handle fire insurance claims. While so employed she investigated a fire loss claim of Claimant against Insurance Company. Attorney is now in private practice. Assume that the original claim was settled. One year after Attorney left the employ of Insurance Company, Claimant slipped and fell in Insurance Company's office. Claimant now asks Attorney to represent him or refer him to another lawyer for suit on the \slip and fall\" claim. Which of the following would be proper for Attorney to do? I. Refuse to discuss the matter with Claimant. II. Represent Claimant. III. Give Claimant a list of lawyers who Attorney knows are competent and specialize in such claims."
    • A. 

      I only

    • B. 

      I and II, but not III

    • C. 

      I and III, but not II

    • D. 

      I, II, and III

  • 4. 
    Attorney represented Husband and Wife in the purchase of a business financed by contributions from their respective separate funds. The business was jointly operated by Husband and Wife after acquisition. After several years, a dispute arose over the management of the business. Husband and Wife sought Attorney's advice, and the matter was settled on the basis of an agreement drawn by Attorney and signed by Husband and Wife. Later, Wife asked Attorney to represent her in litigation against Husband based on the claim that Husband was guilty of fraud and misrepresentation in the negotiations for the prior settlement agreement. Is it proper for Attorney to represent Wife in this matter?
    • A. 

      Yes, if all information relevant to the litigation was received by Attorney in the presence of both Husband and Wife.

    • B. 

      Yes, if there is reason to believe Husband misled both Wife and Attorney at the time of the prior agreement.

    • C. 

      No, because Attorney had previously acted for both parties in reaching the agreement now in dispute.

    • D. 

      No, unless Husband is now represented by independent counsel.

  • 5. 
    Alpha and Beta are members of the bar in the same community but have never practiced together. Beta is a candidate in a contested election for judicial office. Beta is opposed by Delta, another lawyer in the community. Alpha believes Beta is better qualified than Delta for the judiciary and is supporting Beta's candidacy. Which of the following would be proper for Alpha? I. Solicit public endorsements for Beta's candidacy by other attorneys in the community who know Beta, including those who are likely to appear before Beta if Beta becomes a judge. II. Solicit contributions to Beta's campaign committee from other attorneys in the community, including those who are likely to appear before Beta if Beta becomes a judge. III. Publicly oppose the candidacy of Delta.
    • A. 

      I only

    • B. 

      I and II, but not III

    • C. 

      I and III, but not II

    • D. 

      I, II, and III

  • 6. 
    Attorney, who had represented Testator for many years, prepared Testator's will and acted as one of the two subscribing witnesses to its execution. The will gave 10% of Testator's estate to Testator's housekeeper, 10% to Testator's son and sole heir, Son, and the residue to charity. Upon Testator's death one year later, Executor, the executor named in the will, asked Attorney to represent him in probating the will and administering the estate. At that time Executor informed Attorney that Son had notified him that he would contest the probate of the will on the grounds that Testator lacked the required mental capacity at the time the will was executed. Attorney believes that Testator was fully competent at all times and will so testify, if called as a witness. The other subscribing witness to Testator's will predeceased Testator. Is it proper for Attorney to represent Executor in the probate of the will?
    • A. 

      Yes, because Attorney is the sole surviving witness to the execution of the will.

    • B. 

      Yes, because Attorney's testimony will support the validity of the will.

    • C. 

      No, because Attorney will be called to testify on a contested issue of fact.

    • D. 

      No, because Attorney will be representing an interest adverse to Testator's heir at law.

  • 7. 
    Attorney Alpha currently represents Builder, a building contractor who is the plaintiff in a suit to recover for breach of a contract to build a house. Builder also has pending before the zoning commission a petition to rezone property Builder owns. Builder is represented by Attorney Beta in the zoning matter. Neighbor, who owns property adjoining that of Builder, has asked Alpha to represent Neighbor in opposing Builder's petition for rezoning. Neighbor knows that Alpha represents Builder in the contract action. Is it proper for Alpha to represent Neighbor in the zoning matter?
    • A. 

      Yes, if there is no common issue of law or fact between the two matters.

    • B. 

      Yes, because one matter is a judicial proceeding and the other is an administrative proceeding.

    • C. 

      No, because Alpha is currently representing Builder in the contract action.

    • D. 

      No, if there is a possibility that both matters will be appealed to the same court.

  • 8. 
    Attorney was employed as a lawyer by the state Environmental Control Commission (ECC) for ten years. During the last two years of her employment, Attorney spent most of her time in the preparation, trial, and appeal of a case involving the discharge by Deftco of industrial effluent into a river in the state. The judgment in the case, which is now final, contained a finding of a continuing and knowing discharge of a dangerous substance into a major stream by Deftco and assessed a penalty of $25,000. The governing statute also provides for private actions for damages by persons injured by the discharge of the effluent. Attorney recently left the employment of ECC and went into private practice. Three landowners have brought private damage actions against Deftco. They claim their truck farms were contaminated because they irrigated them with water that contained effluent from dangerous chemicals discharged by Deftco. Deftco has asked Attorney to represent it in defense of the three pending actions. Is Attorney subject to discipline if she represents Deftco in these actions?
    • A. 

      Yes, unless the judgment in the prior case is determinative of Deftco's liability.

    • B. 

      Yes, because Attorney had substantial responsibility in the matter while employed by ECC.

    • C. 

      No, because Attorney has acquired special competence in the matter.

    • D. 

      No, if all information acquired by Attorney while representing ECC is now a matter of public record.

  • 9. 
    Attorney Alpha has been employed as an assistant prosecutor in the district attorney's office during the time that an investigation of Deft was being conducted by that office. Alpha took no part in the investigation and had no knowledge of the facts other than those disclosed in the press. Two months ago, Alpha left the district attorney's office and formed a partnership with Attorney Beta. Last week, Deft was indicted for offenses allegedly disclosed by the prior investigation. Deft asked Alpha to represent him. Alpha declined to do so, but suggested Beta. Is Beta subject to discipline if Beta represents Deft?
    • A. 

      Yes, because Alpha was employed in the district attorney's office while the investigation of Deft was being conducted.

    • B. 

      Yes, unless the district attorney's office is promptly notified and consents to the representation.

    • C. 

      No, unless Alpha participates in the representation or shares in the fee.

    • D. 

      No, because Alpha had no responsibility for or knowledge of the facts of the investigation of Deft.

  • 10. 
    Able, Baker, and Carter had been indicted for the armed robbery of the cashier of a grocery store. Together, Able and Baker met with Attorney and asked Attorney to represent them. Attorney then interviewed Able and Baker separately. Each told Attorney that the robbery had been committed by Carter while Able and Baker sat in Carter's car outside the store, that Carter had said he needed some cigarettes, and that each knew nothing of Carter's plan to rob the cashier. Attorney agreed to represent both Able and Baker. One week prior to the trial date, Able told Attorney that he wanted to plea bargain and that he was prepared to turn state's evidence and testify that Baker had loaned Carter the gun Carter used in the robbery. Able also said that he and Baker had shared in the proceeds of the robbery with Carter. It is proper for Attorney to:
    • A. 

      Request court approval to withdraw as lawyer for both Able and Baker.

    • B. 

      Continue to represent Baker and, with Able's consent and court approval, withdraw as Able's lawyer.

    • C. 

      Continue to represent Able and, with Baker's consent and court approval, withdraw as Baker's lawyer.

    • D. 

      Continue to represent Able and Baker, but not call Able as a witness.

  • 11. 
    Attorney represents Bank in its commercial loan transactions. Corp has applied to Bank for a loan of $900,000 to be secured by a lien on Corp's inventory. The inventory, consisting of small items, constantly turns over. The security documents are complex and if improperly drawn could result in an invalid lien. Bank has approved the loan on the condition that Attorney prepare the necessary security instruments and that Corp pay Attorney's fees. This arrangement is customary in the city in which Attorney's law office and Bank are located. It is obvious to Attorney that he can adequately represent the interests of both Corp and Bank. After Corp and Bank consulted with other lawyers, each consented in writing to the representation. Is it proper for Attorney to prepare the security documents under these circumstances?
    • A. 

      Yes, because Bank and Corp have given their informed consent to the arrangement.

    • B. 

      Yes, because the arrangement is customary in the community.

    • C. 

      No, because Attorney's fees are being paid by Corp not Bank.

    • D. 

      No, because Corp and Bank have differing interests.

  • 12. 
    Attorney in his capacity as part-time assistant county attorney represented County in a criminal non-support proceeding against Husband. This proceeding concluded with an order directing Husband to pay or be jailed. Husband refused to pay. Attorney, pursuant to applicable rules, is permitted to maintain a private law practice. Wife has discovered some assets of Husband. Attorney now has accepted employment from Wife to maintain a civil action against Husband to recover out of those assets arrearages due to Wife under Wife's support decree. Attorney did not obtain consent from the county attorney or from Husband to represent Wife in the civil action. Is Attorney subject to discipline for accepting employment in Wife's civil action against Husband?
    • A. 

      Yes, because Attorney did not obtain Husband's consent to the representation.

    • B. 

      Yes, because Attorney had personal and substantial responsibility in the first proceeding.

    • C. 

      No, because Attorney's responsibility in his public employment has terminated.

    • D. 

      No, because Attorney is representing Wife's interest in both the criminal and the civil proceedings.

  • 13. 
    Attorney is representing Plaintiff in a paternity suit against Defendant. Both Plaintiff and Defendant are well-known public figures, and the suit has attracted much publicity. Attorney has been billing Plaintiff at an agreed hourly fee for his services. Recently, Plaintiff told Attorney, "I'm going broke paying you. Why don't you let me assign you all media rights to books, movies, or television programs based on my suit as full payment for all services you will render me between now and the conclusion of the suit?" Attorney replied, "I'll consider it, but first you should seek independent advice about whether such an arrangement is in your own best interests. Why don't you do so and call me next week." Is Attorney subject to discipline if he agrees to Plaintiff's offer?
    • A. 

      Yes, because the amount received by Attorney would be contingent on the receipts from the sale of media rights.

    • B. 

      Yes, because Attorney has not concluded the representation of Plaintiff.

    • C. 

      No, because the paternity suit is a civil and not a criminal matter.

    • D. 

      No, if Plaintiff received independent advice before entering into the agreement.

  • 14. 
    Four years ago, Attorney represented Husband and Wife, both high school teachers, in the purchase of a new home. Since then, Attorney prepared their tax returns and drafted their wills. Recently, Husband called Attorney and told her that he and Wife had decided to divorce, but wanted the matter to be resolved amicably. Husband stated that they were planning to file and process their own divorce case, utilizing the state's new streamlined divorce procedure, applicable in "no-fault" cases where there are no minor children. Husband asked if Attorney would agree to work with them to prepare a financial settlement agreement that could be presented to the divorce court, reminding Attorney that the couple's assets were modest and that they wanted to "split it all down the middle." After considering the risks of a conflict of interest arising in this limited representation, Attorney wrote to the couple separately, and advised each that he or she might be better off with separate lawyers, but that Attorney would assist with the financial settlement agreement, charging an hourly fee of $140 per hour, provided that they were in complete agreement and remained so. Attorney advised that if a conflict developed, or if either party was dissatisfied or uncomfortable about continuing with the joint representation, Attorney would withdraw and would not represent either party from that point forward, forcing them to start all over again with separate lawyers. Finally, Attorney cautioned Husband and Wife that Attorney would be representing both of them equally, would not and could not favor one or the other, and that their separate communications to her could not be kept confidential from the other party. Both Husband and Wife signed their individual copy of the letter, consenting to the joint representation, and returned them to Attorney. Was it proper for Attorney to accept the representation on these terms?
    • A. 

      Yes, because there was little risk that the interests of either Husband or Wife would be materially prejudiced if no settlement was reached.

    • B. 

      Yes, because Attorney had previously represented Husband and Wife in their joint affairs.

    • C. 

      No, because Attorney conditioned representation upon receiving a waiver of client confidentiality.

    • D. 

      No, unless Attorney advised both Husband and Wife, in writing, that they should seek independent counsel before agreeing to enter into the financial settlement on the terms proposed.

  • 15. 
    Attorney represents ten plaintiffs who were injured when a train operated by Railroad was derailed. Railroad has offered Attorney a $500,000 lump sum settlement for the ten plaintiffs. Attorney has determined a division of the $500,000 among the ten plaintiffs with the amount paid each plaintiff dependent on the nature and extent of that person's injuries. Attorney believes the division is fair to each plaintiff. Railroad will not settle any of the claims unless all are settled. Attorney has told each plaintiff the total amount Railroad is prepared to pay, the amount that the individual will receive, and the basis on which that amount was calculated. Attorney has not told any plaintiff the amount to be received by any other plaintiff. Attorney believes that if Attorney reveals to each plaintiff the amount of each settlement, there is danger that some plaintiffs will think that they are not getting enough in relation to the amounts others will receive and the entire settlement will be upset. Each of the plaintiffs has agreed to his or her settlement. Is Attorney subject to discipline if Attorney effects such a settlement?
    • A. 

      Yes, because Attorney is aiding the lawyer for Railroad in making a lump sum settlement.

    • B. 

      Yes, because no individual plaintiff knows the amount to be received by any other plaintiff.

    • C. 

      No, if to disclose all settlements to each plaintiff might jeopardize the entire settlement.

    • D. 

      No, if the amount received by each plaintiff is fair and each plaintiff is satisfied.

  • 16. 
    Four years ago, Alpha was a judge in a state court of general jurisdiction and heard the civil case of Plaintiff against Defendant in which Plaintiff prevailed and secured a judgment for $50,000 which was sustained on appeal. Since then Alpha has resigned from the bench and returned to private practice. Defendant has filed suit to enjoin enforcement of the judgment on the grounds of extrinsic fraud in its procurement. Plaintiff has now asked Alpha to represent Plaintiff in defending the suit to enjoin enforcement. Is it proper for Alpha to accept the representation of Plaintiff in this matter?
    • A. 

      Yes, because Alpha would be upholding the decision of the court.

    • B. 

      Yes, if Alpha's conduct of the first trial will not be in issue.

    • C. 

      No, unless Alpha believes the present suit is brought in bad faith.

    • D. 

      No, because Alpha had acted in a judicial capacity on the merits of the original case.

  • 17. 
    Two years ago, Attorney was employed by State's Department of Transportation (DOT) to search title to several tracts of land. Attorney has not been employed by DOT during the last year. Recently, DOT instituted proceedings to condemn a tract, owned by Owner, for a new highway route. Owner asked Attorney to represent her in obtaining the highest amount of compensation for the condemnation. Owner's tract is one of the tracts on which Attorney searched title two years ago. Attorney remembers that Engineer, a DOT engineer, once drafted a confidential memorandum advising against running a new highway across Owner's land because of potential adverse environmental impact. Because of this information, Attorney believes it is possible to prevent the condemnation of Owner's land or to increase the settlement amount. It is proper for Attorney to:
    • A. 

      Represent Owner on the issue of damages only and not disclose the information that might prevent the condemnation.

    • B. 

      Represent Owner and attempt to prevent the condemnation by using the information about the adverse environmental impact.

    • C. 

      Refuse to represent Owner but disclose to Owner the information about the adverse environmental impact.

    • D. 

      Refuse to represent Owner and not disclose the information about the adverse environmental impact.

  • 18. 
    Judge Alpha has recently resigned from the state trial court bench. While she was a judge and supervising activity in cases pending before Judge Beta, who was on vacation, Alpha entered an administrative order changing the courtroom in which the case of Able v. Baker was to be tried. After trial and appeal, the case was remanded for a new trial. The plaintiff in Able v. Baker has now decided to change lawyers and has asked Alpha to try the case. Will Alpha be subject to discipline if she tries this case on behalf of the plaintiff?
    • A. 

      Yes, because Alpha acted officially as a judge with respect to an aspect of the case.

    • B. 

      Yes, because Alpha would try the case before a judge of the court on which Alpha previously sat.

    • C. 

      No, because Alpha did not act as a judge with respect to a substantial matter or on the merits of the case.

    • D. 

      No, because any information that Alpha learned about the case while acting as a judge was a matter of public record.

  • 19. 
    Attorney was retained by Defendant to represent him in a paternity suit. Aunt, Defendant's aunt, believed the suit was unfounded and motivated by malice. Aunt sent Attorney a check for $1,000 and asked Attorney to apply it to the payment of Defendant's fee. Aunt told Attorney not to tell Defendant of the payment because "Defendant is too proud to accept gifts, but I know he really needs the money." Is it proper for Attorney to accept Aunt's check?
    • A. 

      Yes, if Aunt does not attempt to influence Attorney's conduct of the case.

    • B. 

      Yes, if Attorney's charges to Defendant are reduced accordingly.

    • C. 

      No, because Aunt is attempting to finance litigation to which she is not a party.

    • D. 

      No, unless Attorney first informs Defendant and obtains Defendant's consent to retain the payment.

  • 20. 
    Five years ago, an attorney represented a seller in the sale of the seller's home. The attorney has not represented the seller since that time. Recently the attorney was approached by the seller's partner in a venture capital company formed two years ago. The partner and the seller have agreed to dissolve their partnership but cannot agree on the terms of the dissolution. The partner asked the attorney to sue the seller for an accounting of partnership assets. If the attorney accepts the representation, is the attorney subject to disqualification?
    • A. 

      Yes, because the representation is directly adverse to the seller.

    • B. 

      Yes, unless at the time of the sale of the seller's home, the seller agreed that the attorney would not subsequently be precluded from representing other clients in suits against the seller.

    • C. 

      No, because the partnership dissolution is unrelated to the sale of the seller's home.

    • D. 

      No, unless the seller sold the home while in the partnership with the partner.

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