Opinion ID: 1994454
Heading Depth: 1
Heading Rank: 1

Heading: Concurrent Conflicts of Interest

Text: The PCC alleges the respondent violated Conduct Rule 1.7(a) and (b). At all times relevant to this proceeding, Conduct Rule 1.7 provided: (a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless: (1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and (2) each client consents after consultation and with knowledge of the consequences. (b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless: (1) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents after consultation and with knowledge of the consequences. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved. N.H.R. Prof. Conduct 1.7.
In addition to representing David with respect to the conservatorship, the respondent concurrently represented Brault as conservator. Cf. Vinson & Elkins v. Moran, 946 S.W.2d 381, 402 (Tex. App.1997) (Generally, an attorney hired by the executors or trustees to advise them in administering the estate or trust represents the executors or trustees. ...). Brault contracted for the respondent's services and signed his name, as conservator, on the contract as the client. The respondent thereafter advised Brault concerning the operation of the conservatorship. The PCC contends that the respondent impermissibly represented David and Brault. We agree. A conflict exists under Conduct Rule 1.7(b) when the representation may be materially limited by duties owed to another client. This language is broad, Boyle's Case, 136 N.H. 21, 23, 611 A.2d 618 (1992), and focuses not upon direct adversity at the outset, but the risk that it or other material limitations may arise in the course of the dual representation. See N.H.R. Prof. Conduct 1.7 ABA Model Code Comments; 1 G. Hazard, Jr. & W. Hodes, The Law of Lawyering § 10.4, at 10-12 (3d ed.2007). While Brault was charged with making certain decisions for the ward, see Atlantic Restaurant Mgt. Corp. v. Munro, 130 N.H. 460, 464, 543 A.2d 916 (1988), there existed at least some risk of adversity developing between him and David. See M. Jasper, Guardianship, Conservatorship and the Law 1 (2008) (An improperly conducted... conservatorship can result in fraud and thievery, and can jeopardize the health and safety of the ward or conservatee, particularly when non-family members are appointed as ... conservators.). Certain facts known to the respondent made the risk of adversity between David and Brault significant. The respondent had recently doubted Brault's ability to deal with the complexities of managing [David's] affairs. The respondent assisted David in the past with his relations with trustees. Furthermore, David was contractually compelled to enter the conservatorship as a condition of future support from his mother. Therefore, the respondent, before agreeing to represent Brault, should have foreseen that David might challenge the reasonableness of Brault's discretionary decisions, see Morse v. Trentini, 100 N.H. 153, 156, 121 A.2d 563 (1956), seek a new conservator, see RSA 464-A:15,:39, III (2004), or assert violations of Brault's fiduciary duties. The respondent argues that no conflict could exist in view of the doctrine of primary and derivative clients. See G. Hazard, Jr. & W. Hodes, supra § 2.7, at 2-11. Pursuant to that doctrine, a lawyer representing a fiduciary must be deemed employed to further the fiduciary's legally required service to the beneficiary; must ensure that truthful and complete information is passed along to the client by the fiduciary; and must  disobey instructions that would wrongfully harm the beneficiary. Id. at 2-11, 2-12. There is some support in our Conduct Rules for the doctrine's underlying principle. See N.H.R. Prof. Conduct 1.14 ABA Model Code Comments (2007) (amended 2007) (providing that lawyer representing guardian and aware that guardian acting adversely to ward's interest may have an obligation to prevent or rectify the guardian's misconduct). But see State v. Decker, 138 N.H. 432, 438, 641 A.2d 226 (1994) (noting that Conduct Rules are aimed at policing the conduct of attorneys, not at creating substantive rights on behalf of third parties). However, we have not adopted the primary-derivative client doctrine. We further note that the doctrine appears to rest largely upon cases imposing legal duties upon a lawyer as a basis for civil liability. See G. Hazard, Jr. & W. Hodes, supra § 2.7, at 2-11 to 2-16. The Conduct Rules, however, were designed to provide guidance to lawyers and ... a structure for regulating conduct through disciplinary agencies ... [,] not ... [as] a basis for civil liability, N.H.R. Prof. Conduct Scope Commentary (repealed 2008). See ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 380 (1994) (The fact that the fiduciary client has obligations toward the beneficiaries does not impose parallel obligations on the lawyer, or otherwise expand or supersede the lawyer's responsibilities under the Model Rules of Professional Conduct.). Furthermore, although the doctrine extends to beneficiaries some of the duties owed by the lawyer to the fiduciary-client, including some limited form of loyalty, see G. Hazard, Jr. & W. Hodes, supra § 2.7, at 2-11, this does not create a direct attorney-client relationship with the beneficiary, cf., e.g., In re Estate of Gory, 570 So.2d 1381, 1383 (Fla.Dist.Ct.App.1990), and does not address competing loyalties where a lawyer represents both fiduciary and beneficiary. See 3 R. Mallen & J. Smith, Legal Malpractice § 28:10, at 1267 (2009) (Although in many respects the interests of the ward and conservator coincide, if they diverge, the conservator's attorney owes a duty only to the conservator.); cf. ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 426 (2002) (discussing conflicts where lawyer serving as fiduciary concurrently represents beneficiary of an estate); Restatement (Third) of the Law Governing Lawyers § 135 comment c (2000) (same). The doctrine, therefore, does not relieve a lawyer undertaking dual representation of fiduciary and beneficiary from discussing with both clients future, material limitations that might occur and the effect of such limitations upon the attorney-client relationships, see, e.g., Restatement (Third) of the Law Governing Lawyers § 122 comment c(i). Thus, the respondent violated Conduct Rule 1.7(b) because there is no evidence that he considered and reasonably concluded that the concurrent representation of Brault and David would not adversely affect either client, see N.H. R. Prof. Conduct 1.7(b)(1), or that the clients consented after consultation and with knowledge of the consequences, N.H.R. Prof. Conduct 1.7(b)(2). Although at one point the respondent had [a] lengthy discussion ... about the potential for disagreements and discord between the two, the respondent did not expressly discuss conflicts of interest or their potential impact upon the attorney-client relationship.
A lawyer shall not represent a client if the representation of that client will be directly adverse to another client. ... N.H.R. Prof. Conduct 1.7(a). The PCC asserts that representing Brault and Svetlana in the New Hampshire and Texas guardianship proceedings constituted a violation of Conduct Rule 1.7(a). We agree. The respondent first disputes the finding that he represented Svetlana and Brault in the New Hampshire guardianship proceeding. An attorney-client relationship is created when (1) a person seeks advice or assistance from an attorney, (2) the advice or assistance sought pertains to matters within the attorney's professional competence, and (3) the attorney expressly or impliedly agrees to give or actually gives the desired advice or assistance. McCabe v. Arcidy, 138 N.H. 20, 25, 635 A.2d 446 (1993) (quotation omitted). The stipulated facts and exhibits directly and inferentially support the finding that, by clear and convincing evidence, the respondent formed attorney-client relationships with Brault and Svetlana in pursuit of the New Hampshire guardianship. Consultation with the intent of seeking legal advice is the fundamental basis of the attorney-client relationship. See id. The manifestation of intent may be implied by surrounding circumstances or ratification of the attorney's actions. See Restatement (Third) of the Law Governing Lawyers § 14 comment c. Brault consulted the respondent in late 2001 about guardianships and later accepted the respondent's counsel and continued assistance. Svetlana implicitly sought the respondent's assistance around the time of David's March 1 surgery by relating to the respondent her problems and concerns about David. She too later accepted the respondent's counsel and continued assistance. The respondent thereafter communicated advice in his capacity as a lawyer both before and after Brault and Svetlana hired Attorney Walker to initiate guardianship proceedings. The respondent also drafted affidavits accompanying the petition for guardianship and billed the conservatorship for each of these services. See Bilodeau v. Antal, 123 N.H. 39, 45, 455 A.2d 1037 (1983) (stating that compensation may be evidence of practicing law in representative capacity). Indeed, the respondent confirmed the existence of the attorney-client relationships by advising David after service of the New Hampshire order to retain new counsel. The respondent next argues that pursuing the guardianship was ethically permissible in light of Conduct Rule 1.14 (amended 2007) and Texas Rule of Professional Conduct 1.02(g). He conceded at oral argument that, unless permitted by these rules, representing Brault and Svetlana in the guardianship proceedings violated Conduct Rule 1.7(a). At all times relevant to this action, Conduct Rule 1.14 provided: (a) When a client's ability to make adequately considered decisions in connection with the representation is impaired, whether because of minority, mental disability or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client. The client's impairment shall also be considered in determining the adequacy of consultation. (b) A lawyer may seek the appointment of a guardian or take other protective action with respect to a client, only when the lawyer reasonably believes that the client cannot adequately act in the client's own interest. N.H.R. Prof. Conduct 1.14. In light of the absolute and unconditional right to counsel in guardianship proceedings, RSA 464-A:6, I (2004), we have stressed that a lawyer acting under Conduct Rule 1.14 `shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client.' In re Guardianship of Henderson, 150 N.H. 349, 350, 838 A.2d 1277 (2003) (quoting N.H.R. Prof. Conduct 1.14(a)). This obligation implies that the lawyer should continue to treat the client with attention and respect, attempt to communicate and discuss relevant matters, and continue as far as reasonably possible to take action consistent with the client's directions and decisions. ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 404 (1996). [T]he principle of respecting the client's autonomy dictates that the action taken... should be the action that is reasonably viewed as the least restrictive action under the circumstances. Id. The respondent's actions fell well outside the safe harbor of Conduct Rule 1.14. Although Conduct Rule 1.14(b) clearly permits the lawyer himself to file a petition for guardianship upon concluding that it is necessary to protect the client and there are no less restrictive alternatives available[,] ... nothing in the rule suggests that the lawyer may represent a third party in taking such action. Id. [I]f the lawyer decides to file a guardianship petition, it must be on his own authority under Rule 1.14 and not on behalf of a third party, however well-intentioned. Id. The respondent argues that he complied with Conduct Rule 1.14 because any direct adversity between clients became moot after the Carroll County Probate Court made a finding of incapacity before granting the temporary, limited guardianship over David's person. We acknowledge that there is some support for the contention that a finding of incapacity moots otherwise prohibited adversity. See id. (stating that representation of third parties in seeking guardianship over client is adverse and prohibited by Conduct Rule 1.7(a) unless and until the court makes the necessary determination of incompetence). Nevertheless, the respondent's argument fails because he cannot justify the means chosen  representing others in seeking a guardianship in New Hampshire  by the end result. See id. (Even if the court's eventual determination of incompetence would moot the argument that the representation was prohibited by Rule 1.7(a), the lawyer cannot proceed on the assumption that the court will make such a determination.). Furthermore, appointment of a temporary guardian does not have the effect of an adjudication of incapacity. RSA 464-A: 12, V (2004). Although the Carroll County Probate Court in fact made a specific finding of incapacity, we question the efficacy of the ex parte finding in light of RSA 464-A: 12, V and furthermore because it was entered after a hearing at which the proposed ward, through the respondent's actions, was denied his statutory right to legal counsel, see RSA 464-A:6, I. See RSA 464-A: 12, IV (2004) (providing additional requirements for appointment of temporary guardian when matter is contested); Restatement (Second) of Judgments § 72 (1982) (stating that judgment in a contested action may be avoided by person adjudicated incompetent if inadequately represented by counsel in the proceeding); cf. Restatement (Second) of Judgments § 68(4) (stating that default judgment may be avoided by person adjudicated incompetent if no representative was appointed to act for him or her). Next, the respondent mistakenly cites as justification for his actions Texas Rule of Professional Conduct 1.02, which provides, in relevant part: (g) A lawyer shall take reasonable action to secure the appointment of a guardian or other legal representative for, or seek other protective orders with respect to, a client whenever the lawyer reasonably believes that the client lacks legal competence and that such action should be taken to protect the client. Tex. Gov't Code Ann. tit. 2, subt. G, app. A, art. 10, § 9 (Vernon 2005). This rule is inapplicable to the respondent's actions because at all times relevant to the Texas court proceedings, Conduct Rule 8.5(B) provided, in relevant part: (B) Choice of Law. In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct to be applied shall be as follows: (1) for conduct in connection with a proceeding in a court before which a lawyer has been admitted to practice (either generally or for purposes of that proceeding), the rules to be applied shall be the rules of the jurisdiction in which the court sits, unless the rules of the court provide otherwise; and (2) for any other conduct, (i) if the lawyer is licensed to practice only in this jurisdiction, the rules to be applied shall be the rules of this jurisdiction, and (ii) if the lawyer is licensed to practice in this and another jurisdiction, the rules to be applied shall be the rules of the admitting jurisdiction in which the lawyer principally practices; provided, however, that if particular conduct clearly has its predominant effect in another jurisdiction in which the lawyer is licensed to practice, the rules of that jurisdiction shall be applied to that conduct. N.H.R. Prof. Conduct 8.5 (amended 2005, 2007). Texas law does not apply under Conduct Rule 8.5(B)(1) because there is no evidence that the respondent was admitted to practice in Texas. He was denied admission pro hac vice and was not a member of the Texas bar during the relevant time period. Texas law similarly would not apply under Conduct Rule 8.5(B)(2) because the record indicates that, at the relevant times, the respondent was admitted to practice only in New Hampshire, see N.H.R. Prof. Conduct 8.5(B)(2)(i), and further suggests that his principal practice was in New Hampshire, see N.H.R. Prof. Conduct 8.5(B)(2)(ii).