Source: https://www.omtrial.com/blog/conflicts-of-interest-among-clients
Timestamp: 2019-04-20 21:02:14+00:00

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(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if: . . .
(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. . . .
A lawyer is prohibited from undertaking a representation directly adverse to a current client even if the new matter is unrelated to the matter for which the lawyer is representing the original client. Colo. RPC 1.7, cmt. ; see also ABA Model Rule 1.7, cmt. . The overriding principle is, again, loyalty to the client and concern that the client might feel betrayed, even if the client consents to the conflict. Id.
McDowell told his clients that as long as they had agreed in this fashion, he could prepare documents that would “protect both parties” fully. The contract documents contained many boilerplate provisions that had not been discussed or negotiated by the parties or explained by McDowell prior to the closing. Within the boilerplate were representations that the information disclosed by the seller to the buyer was complete and accurate, and that the corporation was not in default on any of its contracts. McDowell knew that there were three unsatisfied judgments against the corporation, but failed to disclose the information to the buyer. After the closing, the buyer learned of the three judgments and that the corporation owed $20,000 to trade creditors. The buyer retained another lawyer. McDowell continued to represent the seller in negotiating with the buyer’s new lawyer. After negotiations broke down, McDowell filed a lawsuit on behalf of the seller, alleging a breach of the very contract that he had prepared for both parties.
The evidence in this case clearly demonstrates that both the [buyer] and [seller] expected the respondent to act as more than a mere scrivener or intermediary in the sale and purchase of the corporate business . . . . In agreeing to represent both [seller] and [buyer], therefore, the respondent had an obligation to fully disclose at the outset the nature of any potential conflict of interest and the possible effect of such multiple representation on the exercise of [the lawyer’s] independent professional judgment on behalf of both [seller] and [buyer].
Id. at 545. The court also held that McDowell’s refusal to recognize the conflicts of interest, even after hostilities arose between the clients, demonstrated a “callous disregard” of the Code of Professional Responsibility. Id.; see also People v. Koeberle, 810 P.2d 1072 (Colo. 1991) (lawyer represented wife in divorce while simultaneously representing husband in post-dissolution matters arising from an earlier marriage).
The subtler conflict of interest problems arise in the context of representing multiple clients, in the same or unrelated matters, where the clients do not have directly adverse interests but may have indirectly adverse interests. These conflicts also arise when a representation indirectly affects the interests of a lawyer, his or her family, or the lawyer’s law firm, or, as discussed in a recent Colorado Supreme Court case, even as to non-client third parties. Thus, the indirect conflict of interest problems may affect how or to what degree the lawyer advocates for the client. This indirect conflict of interest is sometimes described as a conflict that “materially limits” a lawyer’s ability to represent the client. In other words, the indirect conflict of interest affects the quality of the lawyer’s legal services.
Colo. RPC 1.7(a); see also ABA Model Rule 1.7(a).
Unless all affected clients and other necessary persons consent to the representation under the limitations and conditions provided in § 122, a lawyer may not represent a client if the representation would involve a conflict of interest. A conflict of interest is involved if there is a substantial risk that the lawyer’s representation of the client would be materially and adversely affected by the lawyer’s own interests or by the lawyer’s duties to another current client, a former client, or a third person.
While the primary concern behind the rule is promoting loyalty to the client, the rule is also concerned with preserving a lawyer’s independent professional judgment. Colo. RPC 1.7, cmt. , “General Principles” (“Loyalty and independent judgment are essential elements in the lawyer’s relationship to a client.”); see also ABA Model Rule 1.7, cmt. .
Colo. RPC 1.7(a)(2) applies to conflicts between a lawyer’s joint clients in litigation. Colo. RPC 1.7, cmts. -. The rule applies to conflicts that may arise among clients who are generally aligned in negotiations for the purchase or sale of a business. Such conflicts may arise when a corporation’s lawyer represents the directors or shareholders, personally, as well as the company. Colo. RPC 1.7, cmts. -. The conflicts may involve the lawyer’s own familial, financial, or professional interests. Colo. RPC 1.7, cmts. -.
In a 5-2 decision that appeared to be based on more on deference to the trial court’s discretion than the merits of the parties’ arguments, the Colorado Supreme Court recently addressed the material limitations concerns in Liebnow ex rel. Liebnow v. Boston Enterprises, Inc., 296 P.3d 108 (Colo. 2013). In Liebnow, the question was whether lawyers could adequately represent their client without adversely affecting the material interests of a third party with whom the lawyers had no client-lawyer relationship. The plaintiff had become ill through a food-borne illness and retained Colorado counsel, who had filed a personal injury lawsuit against the defendant restaurant chain and its vendors. Colorado counsel sought to associate with a small, but prominent, out-of-state law firm that has a national practice and expertise in food-borne illnesses. The out-of-state firm sought admission to represent the client pro hac vice in Colorado courts. The out-of-state firm never formed a client-lawyer relationship with the defendant.
The defendants objected to the out-of-state firm’s admission because one of the defense lawyers had briefly consulted with an associate at the out-of-state firm, and the associate had suggested possible defense theories and recommended an expert witness. The defense lawyers claimed that during the consultation they had disclosed confidential information to the out-of-state firm, and thus there was a conflict of interest between the associate lawyer’s obligations to maintain confidentiality and the law firm’s obligation to the plaintiff. The plaintiff offered to waive any conflict of interest. The trial court agreed with the defendants, treated the objection to the pro hac vice motion as a motion to disqualify, and refused to allow the out-of-state firm to represent the plaintiff.
The plaintiff petitioned the supreme court pursuant to C.A.R. 21. The plaintiff argued, first, that Colo. RPC 1.7 applies only to client-lawyer relationships, and because there had been no client-lawyer relationship, the trial court improperly applied Rule 1.7. The plaintiff next argued that even if Rule 1.7 applied, the brief consultation between defense counsel and the associate did not include confidential information and would not materially limit the out-of-state firm’s ability to represent the plaintiff. Finally, the plaintiff argued that even if the consultation created a conflict of interest, the conflict was waivable.
The supreme court affirmed the trial court’s ruling. The court adopted the trial court’s reasoning that the out-of-state associate’s hand in the defense counsel’s theories of the case and defense strategy created divided loyalties. The trial court reasoned that, on the one hand, if the associate were to represent the plaintiff, he would have a responsibility to act in the plaintiff’s best interests using the insight he gained while consulting with defense counsel. Other the other hand, the associate was also responsible to keep the confidences of defense counsel, and would be prevented from doing so by consulting with the plaintiff. The supreme court held that the “trial court was not manifestly arbitrary, unreasonable, or unfair, and therefore did not abuse its discretion in finding that there was a conflict under Colo. RPC 1.7(a).” Id. at 117. The supreme court also affirmed the trial court’s ruling that the consultation between the out-of-state associate and the defense counsel resulted in a nonwaivable conflict that would comprise the fairness of the proceeding, holding that the trial court’s discretion was within the bounds of rationally available choices and within the trial court’s inherent power to ensure the integrity and fairness of the proceedings. Id. at 117-18. The dissent argued that the majority had made two significant errors. First, the dissent argued, the majority erred because it placed virtually no weight on the importance of allowing parties to be represented by counsel of their choice. Second, according to the dissent, the majority erred because it failed to consider the requirement that the court find significant prejudice before disqualification is appropriate. Id. at 118. The dissent argued that because disqualification of a party’s chosen attorney is an extreme remedy, appropriate only where required to preserve the integrity and fairness of the judicial proceedings, it must be supported by a showing not only that the proceedings were seriously threatened, but also by a showing that any remedy short of disqualification would be ineffective. Id. at 120. Hinting at an ulterior motive by defense counsel to disqualify the out-of-state firm, the dissent pointed out an e-mail to plaintiff’s that suggested that the matter of the pro hac vice motion would be moot if the plaintiff dismissed the defendant from the case. Id. at 121 n. 3.
In People v. Hoskins, 333 P.3d 828 (Colo. 2014), a decision again arising from a CAR. 21 original proceeding, the supreme court came to the opposite conclusion about disqualifying trial counsel, and gave no deference to the trial court. The trial court had granted the attorney general’s motion to disqualify criminal defense counsel in a prosecution of numerous individuals and companies participating in the medical marijuana industry for violating the Colorado Organized Crime Control Act and related criminal statutes. The defense counsel had represented an the petitioner, an individual, and a number of companies that the petitioner owned or controlled. The law firm then continued to represent the petitioner in the criminal case. On the attorney general’s moved to disqualify the law firm, arguing that the law firm had a conflict of interest representing the petitioner because it had also represented petitioner’s company in an related tax and employment investigation arising from the same conduct. The attorney general argued that the law firm had been privy to confidential information about the company, and there was a risk that, as part of defending the petitioner, the law firm could use the confidential information to shift blame the company. In response, the law firm argued that any confidential information necessarily came from the petitioner, as he was the company’s controlling owner during the pertinent time, the petitioner still owned a significant portion of the company and had no motive to blame the company, and that any lawyer representing the petitioner would have access to the same supposedly confidential information. After an evidentiary hearing, the trial court disqualified the law firm from representing the petitioner in the criminal case.
In a 6-1 decision, the supreme court held that there was insufficient evidence in the record to support the trial court’s finding that the interests of the petitioner, the individual defendant, and the company were adverse in the criminal proceeding. Id., at 830. In its analysis, the court focused on the importance of the petitioner’s Sixth Amendment right to counsel of his choosing. Id., at 835-835. The court then quickly dispensed with the issue of whether the law firm’s earlier representation was “substantially related” to its current representation of the petitioner for purposes of Colo. RPC 1.9(a), finding that the matters were, in fact, substantially related. Id., at 835-836.
The court focused the heart of its analysis on whether, for purposes of Colo. RPC 1.9(a), the petitioner’s interests were “materially adverse” to the company’s interests such that the petitioner’s lawyers should be disqualified. The court focused on what motive the petitioner would have to use confidential information to hurt the company. The court carefully parsed the evidence about whether the petitioner would have a motive to harm the former client, the company, in order to advance the petitioner’s interest. Id., at 836. The court pointed to the absence of specific facts, beyond speculation, showing a “clear danger of prejudice or a motive to harm [the company] or order to advance [the petitioner’s] interests in [the] criminal case.” Id. The court pointed out that the record showed that the petitioner was the sole senior manager of the company at the periods in question, as thus the sole “high managerial agent” responsible for the company’s conduct. Thus, in the criminal case, to the extent the petitioner attempted to shift blame from himself to the company, he would be pointing the finger at himself and he had no motive to do so. Id., at 837. Moreover, even if the petitioner attempted to shift the blame, the problem could be resolved by severing the trials of the petitioner and the company. Given the petitioner’s strong Sixth Amendment guarantee to be represented by counsel of his choosing, the court found that such Sixth Amendment rights were paramount, and that the attorney general had not met his burden to show that, for purposes of Colo. RPC 1.9(a), the interests of the petitioner were materially adverse to the interests of the company.
The Colorado Court of Appeals addressed the material limitations concerns in People in the Interest of J.A.M., 907 P.2d 725 (Colo. App. 1995). In J.A.M., the court of appeals overturned a juvenile court judgment in a dependency and neglect proceeding terminating a mother’s legal parent-child relationship between the mother and her four-year-old child. The mother contended that the child’s guardian ad litem (GAL) had a conflict of interest because the GAL had entered into a contract with the Denver Department of Social Services to provide legal services to the department in other dependency and neglect proceedings. The mother argued that the GAL’s contractual obligations to the department created a conflict in terms of determining whether it was in the child’s best interest to terminate the parental relationship. The court of appeals agreed. Citing the former version of Colo. RPC 1.7(b), the court held that the GAL’s obligation to the department “materially limited” her representation of the child in violation of the rule. Id. at 726. The court also found that the conflict of loyalties inherent in the GAL’s dual roles as representative of the child’s best interest and as an employee of the department cast doubt on the fairness and impartiality of the legal system. Id.
The traps for the unwary lawyer are many. See, e.g., People v. Chew, 830 P.2d 488 (Colo. 1992). Indeed, a major risk is that the lawyer will fail to recognize such subtle conflicts at all and the issue will not surface until the lawyer is ensnared in a conflict of interest that harms the client. See, e.g., People v. Cozier, 74 P.3d 531 (Colo. PDJ 2003) (lawyer disbarred after he drafted the decedent’s will and trust, had himself appointed as personal representative of the decedent’s estate, and then individually represented devisees and beneficiaries of the trust, when there were significant conflicts among the devisees and beneficiaries). At that point, it may be too late to prevent harm to either the client or the lawyer.
Colo. RPC 1.7(a)(2) governs a lawyer’s simultaneous representation of multiple parties in litigation. Colo. RPC 1.7, cmts. -. When a lawyer represents multiple clients in a matter, the lawyer has a separate client-lawyer relationship with each member of the group. Abbott v. Kidder Peabody, Inc., 42 F. Supp. 2d 1046, 1050 (D. Colo. 1999). Thus, when a lawyer simultaneously represents multiple parties to litigation, such as co-plaintiffs or co-defendants, the representation has the potential for conflicts of interest. The risk of conflicts is particularly great if all of the clients are not exactly aligned or the clients have differing positions on settlement, different damages or injuries, different memories of the facts, or differing degrees of culpability or exposure to a judgment. Colo. RPC 1.7, cmts.  and .
Parties often request lawyers to represent multiple clients in litigation for very practical reasons. Often, the clients wish to avoid the expense of each aligned party retaining separate counsel. Sometimes the clients cannot individually afford the litigation, but they can afford to jointly hire a lawyer. Sometimes, for strategic reasons, the clients desire to present a united front. It is often appropriate and desirable for one lawyer or law firm to represent multiple clients in a lawsuit.
Before agreeing to represent multiple clients, however, the lawyer must very carefully assess the actual and potential conflicts of interest among the clients, and determine whether the clients can properly waive actual or potential conflicts under Colo. RPC 1.7(b)(4). The lawyer must make the necessary disclosures to the clients and obtain written consents to the conflicts of interest.
(2) represent one client to assert or defend a claim against or brought by another client currently represented by the lawyer, even if the matters are not related.
When a lawyer represents multiple clients in litigation, there are four sometimes-competing interests that the lawyer must consider. First, the lawyer may not intentionally or inadvertently use a client’s confidential information on behalf of another client that will adversely affect the first client. Restatement § 128, cmt. b. Second, a client’s faith in the lawyer’s loyalty will be tested if the lawyer must also be loyal to another client whose interests are materially adverse to the first client. Id. Third, a court or tribunal has an interest in ensuring that its own processes are not compromised or delayed because a lawyer cannot provide vigorous advocacy, or because the lawyer must withdraw. Id. Fourth, clients may reasonably desire to reduce litigation costs or obtain the benefits of a coordinated position. Id.
A lawyer can sometimes represent only one human being in a lawsuit and still become ensnared in a conflict of interest. This bizarre circumstance arises when the client is sued personally and is also sued in an official or representative capacity. Persons sued individually as well as in their official capacity are two different legal personages for purposes of the lawsuit. Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 543 n. 6 (1986).
In an interesting case involving a lawyer’s refusal to represent adverse co-defendants who happened to be the same person, the Tenth Circuit Court of Appeals held that a lawyer violated the Rules of Professional Conduct when the lawyer represented the person in one capacity, but left the person unrepresented in his other capacity. Johnson v. Bd. of County Comm’rs, 85 F.3d 489 (10th Cir. 1996).
The client, a county sheriff, was sued for sexual harassment both in his official capacity and in his individual capacity. The lawyer was retained to represent the sheriff in his official capacity only, because the defenses to be asserted by the sheriff in his official capacity were potentially inconsistent with the defenses that the sheriff might wish to raise in his individual capacity. The lawyer declined to represent the sheriff individually, because of the potential for the conflict of interest. However, the sheriff remained unrepresented in his individual capacity and attempted to represent himself pro se, quite unsuccessfully. In a lengthy opinion, U.S. District Judge Kane found that the lawyer had violated the Rules of Professional Conduct (Colo. RPC 1.1 — Competence) and struck the lawyer’s appearance in the case. Johnson v. Bd. of County Comm’rs, 868 F. Supp. 1226 (D. Colo. 1994).
The Tenth Circuit Court of Appeals affirmed Judge Kane’s ruling that the lawyer had violated the Rules of Professional Conduct, but on slightly different grounds. The court found that “[t]hough separate representation is permissible, an attorney may not undertake only the official capacity representation at his or her sole convenience.” The court outlined the disclosures that a lawyer must make when representing clients sued in dual capacities. Johnson, 85 F.3d at 493-94.
Criminal defense lawyers are prohibited from representing a client if the lawyer has a conflict of interest. McCall v. Dist. Court, 783 P.2d 1223, 1227 (Colo. 1989). The right to effective assistance of counsel includes the right to conflict-free counsel. U.S. Const. amend. VI; Colo. Const. art. II, § 16; People v. Preciado-Flores, 66 P.3d 155, 167 (Colo. App. 2002) (citing Holloway v. Arkansas, 435 U.S. 475 (1978)); People v. Delgadillo, 275 P.3d 772, 775 (Colo. App. 2012). The Colorado Supreme Court observed that “[t]he need for defense counsel to be completely free from a conflict of interest is of great importance and has a direct bearing on the quality of our criminal justice system.” McCall, 783 P.2d at 1227 (citing Allen v. Dist. Court, 519 P.2d 351, 352-53 (Colo. 1974)).
Thus, when the issue on appeal of a criminal conviction is ineffective assistance of counsel, the defense lawyer who represented the defendant at trial is precluded from representing the defendant in the appeal because the defense lawyer’s personal and professional interests are at stake. People ex rel. Peters v. Dist. Court, 951 P.2d 926, 930 (Colo. 1999); McCall, 783 P.2d at 1227; Allen, 519 P.2d at 352-53; see also People v. Castro, 657 P.2d 932, 943-45 (Colo. 1983). This is true even though some defense counsel regard raising such a defense on appeal as a badge of honor. And if the disqualified lawyer is a public defender, the other lawyers within the Office of the Public Defender are also disqualified by the doctrine of imputed disqualification. McCall, 783 P.2d at 1227-29. The Office of the Public Defender may also be disqualified from representing a criminal defendant when the office represents another defendant in an unrelated matter who may be a witness in the first client’s criminal case. Allen, 519 P.2d at 353.
A Colorado Supreme Court case illustrates the conflicts that can arise when a lawyer represents multiple defendants in a criminal case, and when the lawyer’s duty of loyalty to one client is materially limited by his or her duty of loyalty to another client. In People v. Chew, 830 P.2d 488 (Colo. 1992), the lawyer simultaneously represented a father and a son in a criminal case, both charged with arson and conspiracy. The lawyer clearly considered the conflict of interest, discussed the conflict with his clients, and obtained written waivers from both. As the case developed, it became apparent that the father and son had different degrees of culpability for the criminal conduct.
When it became clear that the conflict of interest issues were going to be insurmountable, the father waived the conflict of interest problems a second time. The trial court appointed the father his own lawyer. The lawyer continued to represent the son. When the prosecution offered a plea to the son that would substantially reduce the son’s sentence if he testified against his father, the trial court appointed a special counsel to convey the offer. Eventually, both father and son pleaded guilty, with the father receiving a 16-year sentence and the son receiving a five-year sentence.
Despite all of the precautions, the Colorado Supreme Court still disciplined the lawyer. The court found that the waivers did not satisfy the first requirement of the former DR 5-105(C), which permitted the lawyer to represent multiple clients only if it was “obvious” that the lawyer could “adequately” represent the interests of each client. Id. at 489. The court found that the lawyer could not adequately represent the interests of each client because of the different degrees of culpability. In other words, the lawyer’s duty of loyalty to the son required him to advise the son to testify against the father and the lawyer’s duty of loyalty to the father required him to resist such efforts. Id.
The Colorado Supreme Court addressed the issue of whether a district attorney’s office was disqualified from prosecuting a minor in People ex rel. N.R., 139 P.3d 671 (Colo. 2006). In N.R., a 16-year-old male passenger in an automobile abandoned the 15-year-old female driver pinned under the car when they were involved in a rollover accident, and the male passenger did not notify anyone of the accident. The female driver later died. The district attorney refused to prosecute the boy, so the parents of the deceased girl filed a petition for order requiring district attorney to explain refusal to prosecute under C.R.S. § 16-5-209 (2005). There were hearings on the issue. Several months later, the district attorney was voted out of office; the new district attorney received substantial political support from the deceased girl’s parents.
Once elected, the new district attorney filed criminal charges against the boy. The boy’s attorney filed a motion to disqualify the entire district attorney’s office, claiming a conflict of interest on two grounds: first, that the district attorney had a personal interest in the outcome of the criminal prosecution because his campaign had received political and financial support from the deceased girl’s parents; and second, the statements and positions earlier taken by the district attorney’s office in connection with hearings on the motion filed by the deceased girl’s parents contradicted the current positions of the office.
The trial court considered C.R.S. § 20-1-107(2), which authorizes disqualification of a district attorney when the court finds “that the district attorney has a personal or financial interest or finds special circumstances that would render it unlikely that the defendant would receive a fair trial.” Applying the statute to the case, the trial judge ruled that the district attorney’s office did not have a personal or financial interest in the case that required its disqualification. However, the trial judge disqualified the office on the “special circumstances” grounds, i.e., that given the political support given by the deceased girl’s parents, in the context of the rather strong position against prosecution taken by the prior district attorney, there was an appearance of impropriety that required disqualification.
The Colorado Supreme Court, with a partial dissent by Justice Bender, joined by Justices Mullarkey and Martinez, disagreed with the trial court. The court found that a 2002 amendment to C.R.S. § 20-1-107(2) eliminated the “appearance of impropriety” provision. In strictly applying the statute to the case, the court held that the deceased girl’s parents’ financial and political support of the district attorney’s campaign did not amount to a personal or financial interest that disqualified the district attorney’s office. Similarly, the court held that despite the political support of the deceased girl’s parents, the circumstances were not such that the defendant boy would not receive a fair trial. Id. at 677-78.
In his dissent, Justice Bender argued that the majority was too narrowly construing the grounds by which a district attorney could be disqualified pursuant to C.R.S. § 20-1-107(2), and, although the “appearance of impropriety” standard was no longer part of the statute, the courts had the inherent power to regulate conduct of the lawyers before them, including the conduct of district attorneys. In addition to raising a separation of powers argument, Justice Bender noted that pursuant to the former Colo. RPC 1.9(a), a trial court has the inherent power to disqualify a district attorney where the prosecutor may have represented a defendant on another matter and the defendant had waived the conflict of interest. Justice Bender argued that the trial court’s decision should be upheld because the fact that the district attorney: who enjoyed substantial political support from the mother of the victim, reversed the rather strongly held position of [his predecessor] relative to the prosecution of this case would tend to lead average members of the community [to believe] that [the district attorney] was somehow beholden to the victim’s family, leading to a political payoff in this case. I. at 684-85.
In a case issued on the same day as People ex rel. N.R., the supreme court addressed the issue of whether a district attorney’s office should be disqualified from a prosecution when (1) the defendant minor child and her family had been represented by three members of the district attorney’s office while in private practice (and still maintained the files) and (2) the defendant and her family were suing other members of the district attorney’s office on civil rights claims. People ex rel. E.L.T., 139 P.3d 685 (Colo. 2006).
[T]hese circumstances support the trial court’s decision to disqualify the district attorney’s office pursuant to its constitutional authority to protect the integrity and appearance of integrity of the court and the judicial process, and therefore his order to disqualify the district attorney’s office does not constitute an abuse of discretion. Id. at 688.
In People v. Hoskins, 333 P.3d 828 (Colo. 2014), the supreme court reversed a trial court decision disqualifying criminal defense counsel because of a conflict of interest. In a 6-1 decision written by Justice Marquez, the supreme court held that there was insufficient evidence in the record to support the trial court’s finding that the interests of the petitioner, the individual defendant, and the company were adverse in the criminal proceeding. Id., at 830. The court focused the heart of its analysis on whether, for purposes of Colo. RPC 1.9(a), the petitioner’s interests were “materially adverse” to the company’s interests such that the petitioner’s lawyers should be disqualified and, specifically, what motive the petitioner would have to use confidential information to hurt the company. The court pointed to the absence of specific facts, beyond speculation, showing a “clear danger of prejudice or a motive to harm [the company] or order to advance [the petitioner’s] interests in [the] criminal case.” Id. The court pointed out that the appellate record showed that the petitioner was the sole senior manager of the company at the periods in question, as thus the sole “high managerial agent” responsible for the company’s conduct. Thus, in the criminal case, to the extent the petitioner attempted to shift blame from himself to the company, he would be pointing the finger at himself and he had no motive to do so. Id., at 837. Moreover, even if the petitioner attempted to shift the blame, the problem could be resolved by severing the trials of the petitioner and the company. Given the petitioner’s strong Sixth Amendment guarantee to be represented by counsel of his choosing, the court found that such Sixth Amendment rights were paramount, and that the attorney general had not met his burden to show that, for purposes of Colo. RPC 1.9(a), the interests of the petitioner were materially adverse to the interests of the company.
In People v. Curren, 228 P.3d 253 (Colo. App. 2009), the Colorado Court of Appeals addressed a defense lawyer’s conflict of interest when a client was extradited from Mexico after being charged with various murder counts. The client, unhappy with his first lawyer, hired another lawyer to work with the first defense lawyer and then told the second lawyer that the first lawyer had advised him to flee to Mexico. When confronted by the second lawyer, the first lawyer heatedly denied the accusation, and told the client that he had to choose either between the first lawyer or the second lawyer. The first lawyer’s law partner interviewed the client and determined that the client in fact had not accused the first lawyer of advising the client to flee to Mexico. Thus, the first lawyer continued with the representation. The client was convicted at trial, and subsequently filed a Rule 35(c) motion claiming ineffective assistance of counsel because of an actual conflict of interest that arose once he had allegedly accused the first lawyer of the inappropriate advice.
After a hearing, the trial court concluded that while the first lawyer had not advised the client to flee to Mexico, the client had, in fact, made the accusation and such created an actual conflict of interest. Accordingly, the trial court granted the client a new trial. The prosecution appealed.
The court of appeals affirmed the trial court. In its decision, the court found that the trial counsel had understandably become very upset when accused — falsely — of telling the client to flee to Mexico, and the fact that the lawyer had become upset created an actual conflict of interest. The court noted that “[a]n actual conflict of interest arises when it places counsel in the position of having to simultaneously defend his or her client and himself or herself, particularly in those instances in which counsel faces potential professional and criminal sanctions.” Id. The court concluded that the actual conduct created an adverse effect on the client’s defense.
In a 2014 original proceeding, the Colorado Supreme Court held that the trial court had abused its discretion by refusing to allow defense counsel to withdraw from representing the defendant in a white-collar criminal case on the apparently well-justified grounds that the defendant, who had already retained and fired other counsel, was again firing his lawyers as a tactic to delay the trial. People v. DeAltley, 333 P.3d 61 (Colo. 2014). After the defendant fire his second set of counsel, the defense counsel moved to withdraw. The trial court denied the motion. The defendant then served his lawyers with a malpractice complaint, and later filed the malpractice lawsuit in the federal district court in the state of Washinton courts. The defense counsel again moved to withdraw, which the trial court denied, finding that while there were irreconcilable differences between the defendant and his lawyers, the defense counsel could “ ‘balance their personal interests implicated by the Defendant’s actions with their obligation to represent himsuch that the can effectively do so. . . .’” Id., at 63.
At the hearings before the trial court, at later as part of their CAR 21 hearing, the defense counsel argued that their obligations pursuant to Colo. RPC 1.16 and 1.7(a)(2) prohibited them from continuing to represent the defendant because of the conflict of interest created by the defendant’s decision to sue them for malpractice. Id, at 64-65. Again, in its analysis the supreme court focused on a criminal defendant’s Sixth Amendment right to counsel of his or her chosing. The court held that defense counsel’s denial of the defense counsel’s motion to with draw despite a finding of irreconcilable conflict of interests was an abuse of discretion. The supreme court found that even if the defendant was abusing the system by concocting reasons to delay the trial, there were other alternatives to remedy the problem, including, in the end, warning the defendant that if he failed to retain counsel, he would implicitly waive his constitutional sright to counsel and be required to represent himself. Id., at 66-67.
Lawyers who represent organizations, such as corporations, nonprofits, or government agencies, often encounter conflict-of-interest problems. These problems typically arise when a lawyer is asked to represent the individuals associated with the client-organization. The individuals may be owners, officers or directors, or family members of the controlling persons. These circumstances are rife with possible conflicts of interest between the lawyer’s duties of loyalty to the organization, and the duties of loyalty to the individual client. The representation is often complicated because the individual client, particularly if an owner or control person, may not understand (or care) about the distinction between the individual and the organization.
A lawyer may also encounter a conflict of interest between a lawyer’s organizational client and the organization’s affiliates or subsidiaries. Restatement § 131, cmt. d, pp. 367-68; Colo. RPC 1.7, cmts.  and , “Organizational Clients.” Sometimes conflicts can develop because of a corporate merger or sale. Colo. RPC 1.7, cmt. ; see also ABA Model Rule 1.7, cmt. .
A lawyer for a corporation generally does not have a client-lawyer relationship with the shareholders, officers, or directors, barring other facts. Colo. RPC 1.7, cmt. ; Colo. RPC 1.13, cmt. . Similarly, a lawyer does not have a client-lawyer relationship with each of the partners or members of the organization. Turkey Creek, LLC v. Rosania, 953 P.2d 1306, 1311 (Colo. App. 1998); Zimmerman v. Dan Kamphausen Co., 971 P.2d 236, 241 (Colo. App. 1998); Colo. RPC 1.7, cmt. . A lawyer who represents an organization will not necessarily also represent the individuals running the organization. The former Colo. RPC 1.13 explicitly states that a lawyer representing the organization represents the organization, and not those persons affiliated with the organization. Former Colo. RPC 1.13 states: “(a) A lawyer employed or retained by an organization represents the organization which acts through its duly authorized constituents, and the lawyer owes allegiance to the organization itself, and not its individual stockholders, directors, officers, employees, representatives or other persons connected with the entity.” The revised Rule 1.13 softened that position to acknowledge that lawyers sometimes represent both the organization and its constituent members, such as officers, directors, members, shareholders, and employees. Colo. RPC 1.13(g).
Unless all affected clients consent to the representation under the limitations and conditions provided in § 122, a lawyer may not represent both an organization and a director, officer, employee, shareholder, owner, partner, member, or other individual or organization associated with the organization if there is a substantial risk that the lawyer’s representation of either would be materially and adversely affected by the lawyer’s duties to the other.
When a lawyer does represent both an organization and associated individuals, a conflict-of-interest problem often arises when a lawyer obtains confidential information from the organizational client and also obtains confidential information from the individual client. The confidential information from either client may affect the lawyer’s representation of the other, and require the lawyer to withdraw from representing both. See ABA Formal Opinion 91-361 (1991); Colo. RPC 1.7, cmts.  and ; ABA Model Rule 1.7, cmts.  and . Lawyers who represent organizations should be particularly careful when asked to represent individuals who are even remotely connected with the client organization.

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