ANNOTATIONSSource:
Committee comment amended October 17, 1996, effective January 1, 1997.
COMMENT
Loyalty to a Client
Loyalty is an essential element in the lawyer's relationship to a
client. An impermissible conflict of interest may exist before
representation
is undertaken, in which event the representation should be declined.
If such conflict arises after representation has been undertaken,
the lawyer should withdraw from the representation. See Rule 1.16.
Where more than one client is involved and the lawyer withdraws because
a conflict arises after representation, whether the lawyer may continue
to represent any of the clients is determined by Rule 1.9. See also
Rule 2.2(c). As to whether a client-lawyer relationship exists or,
having once been established, is continuing, see Comment to Rule 1.3 and
Scope.
As a general proposition, loyalty to a client prohibits
undertaking representation directly adverse to that client without that
client's consent. Paragraph (a) expresses that general rule. Thus, a
lawyer ordinarily may not act as advocate against a person the lawyer
represents in some other matter, even if it is wholly unrelated. On the
other hand, simultaneous representation in unrelated matters of clients
whose interests are only generally adverse, such as competing economic
enterprises, does not require consent of the respective clients.
Paragraph (a) applies only when the representation of one client would
be directly adverse to the other.
Loyalty to a client is also impaired when a lawyer cannot
consider, recommend or carry out an appropriate course of action for the
client because of the lawyer's other responsibilities or interests.
The conflict in effect forecloses alternatives that would
otherwise be available to the client. Paragraph (b) addresses such
situations. A possible conflict does not itself preclude the
representation. The critical questions are the likelihood that a
conflict will eventuate and, if it does, whether it will materially
interfere with the lawyer's independent professional judgment in
considering alternatives or foreclose courses of action that reasonably
should be pursued on behalf of the client. Consideration should be
given to whether the client wishes to accommodate the other interest
involved.
Consultation and Consent
A client may consent to representation notwithstanding a conflict,
but only after consultation which involves full disclosure of the
possible effect of such dual representation on the exercise of the
lawyer's independent professional judgment on behalf of each client.
However, when a disinterested lawyer would conclude that the client
should not agree to the representation under the circumstances, the
lawyer involved cannot properly ask for such agreement or provide
representation on the basis of the client's consent. When more than one
client is involved, the question of conflict must be resolved as to each
client. Moreover, there may be circumstances where it is impossible to
make the disclosure necessary to obtain consent. For example, when the
lawyer represents different clients in related matters and one of the
clients refuses to consent to the disclosure necessary to permit the
other client to make an informed decision, the lawyer cannot properly
ask the latter to consent.
Lawyer's Interests
The lawyer's own interests should not be permitted to have adverse
effect on representation of a client. For example, a lawyer's need for
income should not lead the lawyer to undertake matters that cannot be
handled competently and at a reasonable fee. See Rules 1.1 and 1.5. If
the probity of a lawyer's own conduct in a transaction is in serious
question, it may be difficult or impossible for the lawyer to give a
client detached advice. A lawyer may not allow related business
interests to affect representation, for example, by referring clients to
an enterprise in which the lawyer has an undisclosed interest.
Conflicts in Litigation
Paragraph (a) prohibits representation of opposing parties in
litigation. Simultaneous representation of parties whose interests in
litigation may conflict, such as coplaintiffs or codefendants, is
governed by paragraph (b). An impermissible 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. Such conflicts can arise in
criminal cases as well as civil. 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. On the other hand, common representation of persons having
similar interests is proper if the risk of adverse effect is minimal and
the requirements of paragraph (b) are met. Compare Rule 2.2 involving
intermediation between clients.
Ordinarily, a lawyer may not act as advocate against a client the
lawyer represents in some other matter, even if the other matter is
wholly unrelated. However, there are circumstances in which a lawyer
may act as advocate against a client. For example, a lawyer
representing an enterprise with diverse operations may accept employment
as an advocate against the enterprise in an unrelated matter if doing so
will not adversely affect the lawyer's relationship with the enterprise
or conduct of the suit and if both clients consent upon consultation.
By the same token, government lawyers in some circumstances may
represent government employees in proceedings in which a government
agency is the opposing party. The propriety of concurrent
representation can depend on the nature of the litigation. For example,
a suit charging fraud entails conflict to a degree not involved in a
suit for a declaratory judgment concerning statutory interpretation.
A lawyer may represent parties having antagonistic positions on a
legal question that has arisen in different cases, unless representation
of either client would be adversely affected. Thus, it is ordinarily
not improper to assert such positions in cases pending in different
trial courts, but it may be improper to do so in cases pending at the
same time in the appellate court.
Interest of Person Paying for a Lawyer's Service
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 to the client. See Rule 1.8
(f). For example, when an insurer and its insured have conflicting interests
in a matter arising from a liability insurance agreement, and the insurer is
required to provide special counsel for the insured, the arrangement should
assure the special counsel's professional independence. So also, when a
corporation and its directors or employees are involved in a controversy in
which they have conflicting interests, the corporation may provide funds for
separate legal representation of the directors or employees, if the clients
consent after consultation and the arrangement ensures the lawyer's
professional independence.
Other Conflict Situations
Conflicts of interest in contexts other than litigation sometimes
may be difficult to assess. Relevant factors in determining whether
there is potential for adverse effect include the duration and intimacy
of the lawyer's relationship with the client or clients involved, the
functions being performed by the lawyer, the likelihood that actual
conflict will arise and the likely prejudice to the client from the
conflict if it does arise. The question is often one of proximity and
degree.
For example, a lawyer may not represent multiple parties to a
negotiation whose interests are fundamentally antagonistic to each
other, but common representation is permissible where the clients are
generally aligned in interest even though there is some difference of
interest among them.
Conflict questions may also arise in estate planning and estate
administration. A lawyer may be called upon to prepare wills for
several family members, such as husband and wife, and depending upon the
circumstances, a conflict of interest may arise. In estate
administration the identity of the client may be unclear under the law
of a particular jurisdiction. Under one view, the client is the
fiduciary; under another view the client is the estate or trust,
including its beneficiaries. The lawyer should make clear the
relationship to the parties involved.
A lawyer for a corporation or other organization who is also a
member of its board of directors should determine whether the
responsibilities of the two roles may conflict. The lawyer may be
called on to advise the corporation in matters involving actions of the
directors. Consideration should be given to 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. If there is material risk that the dual role will
compromise the lawyer's independence of professional judgment, the
lawyer should not serve as a director.
Conflict Charged by an Opposing Party
Resolving questions of conflict of interest is primarily the
responsibility of the lawyer undertaking the representation. In
litigation, a court may raise the question when there is reason to infer
that the lawyer has neglected the responsibility. In a criminal case,
inquiry by the court is generally required when a lawyer represents
multiple defendants. Where the conflict is such as clearly to call in
question
the fair or efficient administration of justice, opposing counsel may
properly
raise the question. Such an objection should be viewed with caution,
however,
for it can be misused as a technique of harassment. See Scope.
COMMITTEE COMMENT
The rule adopted is identical to Model Rule 1.7 except for section
(c) which the Committee felt was necessary in order to provide more
protection for a client whose consent is sought as a way of resolving a
conflict of interest between the lawyer and client. The addition states
that consent should not be obtained from a client in a situation in
which a disinterested lawyer would advise the client not to agree to the
representation.
For a discussion of the ethical ramifications of sexual relationships
between a lawyer and a client see the committee comment to Rule 8.4.
ANNOTATION
Law reviews. For formal opinion of the Colorado Bar Association on
Ethical Duties of Attorney Selected by Insurer to Represent Its Insured, see
22 Colo. Law. 497 (1993).
Annotator's note.
Since Rule 1.7 is similar to
DR 5-101, DR 5-102, DR 5-104, DR 5-105, and DR 5-107 as they
existed prior to the 1992 repeal and reenactment of the Code of
Professional Responsibility, relevant cases construing
those provisions have
been included in the annotations to this rule.
Where there is a large group of clients who are not recognized as a single legal
entity, an attorney has an attorney-client relationship with each individual member of the
group. Abbott v. Kidder Peabody & Co., Inc., 42 F. Supp.2d 1046 (D. Colo.
1999).
Representation agreement that gives counsel the ability to negotiate settlement for
each member of a large group of clients without providing him or her with personalized
advisement and without obtaining individual authority to enter into a settlement
agreement violates the professional and ethical standards created to regulate the legal
profession in Colorado. Abbott v. Kidder Peabody & Co., Inc., 42 F. Supp.2d 1046 (D.
Colo. 1999).
Any provision of an attorney-client agreement that deprives a client of a right to control
his or her case is void as against public policy. Abbott v. Kidder Peabody & Co., Inc.,
42 F. Supp.2d 1046 (D. Colo. 1999).
Valid client consent to waive the potential conflict of interest cannot be obtained under
the circumstances. Abbott v. Kidder Peabody & Co., Inc., 42 F. Supp.2d 1046 (D.
Colo. 1999).
Where counsel simultaneously represented company's interests as well as
those of company's employees for a substantial period of time and the
representation continued through the emergence of conflicts, counsel could
continue to represent company because the company and the former clients,
the employees, through counsel, consented to such representation after
consultation and there was an indication that counsel reasonably believed that
the continued representation would not adversely affect the relationship with
the former clients. Gates Rubber Co. v. Bando Chem. Indus., Ltd., 855 F. Supp.
330 (D. Colo. 1994).
Lawyer violated paragraph (b) when his representation of a client was
materially limited by his responsibilities to another client. He represented loan documents
to be investment agreements to circumvent a provision in the Colorado Liquor Code that
restricts the cross-ownership of businesses holding liquor licenses. In re Lopez, 980 P.2d
983 (Colo. 1999).
Public censure was appropriate for attorney who violated this rule by
simultaneously representing, as defendants in a quantum meruit and lis pendens
suit initiated by a subcontractor, the homeowners, the general contractor, the
bank holding deed of trust on homeowners property, and two other parties who
had contracted with contractor. Balancing the seriousness of the misconduct
with the factors in mitigation, and taking into account the respondent's mental
state when he entered into the conflicts in representation, public censure is appropriate.
People v. Fritze, 926 P.2d 574 (Colo. 1996).
Public censure warranted for attorney's solicitation of prostitution
during
telephone conversation with wife of client whom he was representing in a
dissolution of
marriage proceeding. People v. Bauder, 941 P.2d 282 (Colo. 1997).
Critical inquiry when representation of one client may be limited by
representation of another is whether a conflict is likely to arise, and, if
so, whether it materially interferes with the lawyer's independent
professional
judgment. People in Interest of J.A.M., 907 P.2d 725 (Colo. App. 1995).
Actual conflict existed where criminal charges were pending against
defense
counsel in the same district in which his client was being prosecuted.
People v.
Edebohls, 944 P.2d 552 (Colo. App. 1996).
Attorney's representation of criminal defendant for whom attorney negotiated a plea
bargain for testifying against another criminal defendant prohibited attorney from also
representing the other criminal defendant where such other defendant did not consent
to conflict-free counsel. People ex rel. Peters v. District Court, 951 P.2d 926 (Colo. 1998).
Attorney who was the trustee of client's trust violated paragraph (b)
by
utilizing the trust's funds to loan money to his daughter and to purchase
his son-in-law's
parents' former residence for the purpose of leasing it back to them, and
by then failing to
take any legal action against them when they did not make lease payments.
People v.
DeRose, 945 P.2d 412 (Colo. 1997).
Preparation of an extension agreement on the repayment of a loan made to a client
by the attorney violated paragraph (b) because certain exceptions were not satisfied.
People v. Ginsberg, 967 P.2d 151 (Colo. 1998).
Thirty-day suspension warranted where lawyer, who represented an
individual accused of first-degree murder, communicated with co-defendant
who also
was charged with first-degree murder and whose interests were adverse to
the lawyer's
client, without the knowledge or consent of the co-defendant's lawyers. The
potential for
harm was high in a first-degree murder case and the number of unauthorized
contacts
demonstrated more than negligence on the lawyer's part. People v. DeLoach, 944
P.2d
522 (Colo. 1997).
Suspension for three years was appropriate in case involving
violation of
this rule and others, together with attorney's breach of his duty as
client's trustee to
protect his client, who was a particularly vulnerable victim that was
recuperating from a
serious head injury. People v. DeRose, 945 P.2d 412 (Colo. 1997).
Suspension for three years, rather than disbarment, was appropriate where
violation of this rule and others caused serious harm to attorney's clients, but mitigating
factors were present, including no previous discipline in 14 years of practice, personal and
emotional problems, and cooperation and demonstrated remorse in proceedings.
Attorney's ability to represent his client in a bankruptcy was materially limited
by his own interest as a creditor in collecting attorney fees.
People v. Henderson, 967 P.2d 1038 (Colo. 1998).
The presumed sanction of suspension is appropriate where the attorney
knew of a conflict of interest and did not fully disclose to a client the possible effect of
that conflict even though such action caused no actual harm. In re Cimino, 3 P.3d 398
(Colo. 2000).
Whether an attorney expects to be paid or not is insignificant to the issue of whether
an attorney-client relationship existed. In re Cimino, 3 P.3d 398 (Colo. 2000).
The hearing panel of the former grievance committee committed harmless error by
failing to consider the personal and emotional problems that an attorney was experiencing
at the time of the attorney's misconduct as mitigating in determining sanctions because no
medical or psychological proof of emotional problems was brought forward. In re
Cimino, 3 P.3d 398 (Colo. 2000).
Conduct violating this rule in conjunction with other disciplinary rules is
sufficient to justify suspension.
People v. Robinson, 853 P.2d 1145 (Colo. 1993);
People v. Good, 893 P.2d 101 (Colo. 1995);
People v. Silver, 924 P.2d 159 (Colo. 1996);
People v. Mason, 938 P.2d 133 (Colo. 1997);
People v. Reed, 955 P.2d 65 (Colo. 1998);
In re Tolley, 975 P.2d 1115 (Colo. 1999).
Conduct violating this rule in conjunction with other disciplinary rules is
sufficient to justify disbarment. People v. Bennett, 843 P.2d 1385 (Colo.
1993); In re Lopez, 980 P.2d 983 (Colo. 1999).
Cases Decided Under Former DR 5-101.
Law reviews.
For article, "The Conflicted Attorney", see 11 Colo. Law. 2589 (1982).
For article, "The Ethics of Moving for Disqualification of Opposing
Counsel", see 13 Colo. Law. 55 (1984).
For article, "Why Shouldn't an Attorney Go Into Business With a Client?",
see 13 Colo. Law. 431 (1984).
For article, "Avoiding Family Law Malpractice: Recognition and Prevention
-- Part I", see 14 Colo. 787 (1985).
For article, "Conflicts of Interest", see 15 Colo. Law. 2001 (1986).
For article, "Defending the Federal Drug or Racketeering Charge", see 16
Colo. Law. 605 (1987).
For article, "Sex, Lawyers and Vilification", see 21 Colo. Law. 469 (1992).
License to practice law assures public that the lawyer who holds the
license will perform basic legal tasks honestly and without undue delay,
in accordance with the highest standards of professional conduct.
People v. Dixon, 621 P.2d 322 (Colo. 1981).
Public expects appropriate discipline for misconduct.
The public has a right to expect that one who engages in professional
misconduct will be disciplined appropriately.
People v. Dixon, 621 P.2d 322 (Colo. 1981).
A lawyer, by preparing 95 to 99 percent of the pleadings, continues
to represent a client even though he has other attorneys sign the pleadings.
People v. Garnett, 725 P.2d 1149 (Colo. 1986).
Public censure warranted where attorney engaged in sexual relations with
client attorney represented in dissolution of marriage action even though
client suffered no actual harm. People v. Zeilinger, 814 P.2d 808 (Colo.
1991).
By investing trust funds in a venture in which the attorney was
involved financially and professionally,
he allowed his personal interests to affect the exercise of his
professional judgment on behalf of his client in violation of DR 5-101(A),
justifying suspension from practice.
People v. Wright, 698 P.2d 1317 (Colo. 1985).
Theft of client's money, misrepresentations, representation of multiple
clients with adverse interests, and failure to respond to informal complaints
warrants disbarment.
People v. Quick, 716 P.2d 1082 (Colo. 1986).
Conduct found to violate disciplinary rules.
People v. Razatos, 636 P.2d 666 (Colo. 1981),
appeal dismissed, 455 U.S. 930, 102 S. Ct. 1415, 71 L.Ed.2d 639 (1982).
Representing client without full disclosure of potential conflict of
interest violates disciplinary rule. People v. Watson, 787 P.2d 151
(Colo. 1990).
No violation of paragraph (A). Although disclosure was inadequate as to the
nature of the business relationships between the attorney and his business-partner client,
record does not support conclusion that attorney's business relationship with individual client
would or reasonably might affect his professional judgment with respect to his representation
of that client. In re Quiat, 979 P.2d 1029 (Colo. 1999).
Violation of paragraph (B) where attorney knew, when he accepted
employment in connection with his client's bankruptcy, that he could be a witness by virtue
of his interests in the general and limited partnerships that were assets of the bankruptcy
estate, and by his failure to transfer the partnership interests to his client's children prior to
the filing of the bankruptcy. In re Quiat, 979 P.2d 1029 (Colo. 1999).
Representation of client when the exercise of the lawyer's professional judgment on
behalf of the client will be or reasonably may be affected by the lawyer's own financial,
business, property, or personal interests violates disciplinary rule. People v. Ginsberg,
967 P.2d 151 (Colo. 1998).
Conduct violating this rule in conjunction with other disciplinary rules is
sufficient to justify public censure. People v. Stevens, 883 P.2d 21 (Colo.
1994);
People v. Wollrab, 909 P.2d 1093 (Colo. 1996);
People v. O'Donnell, 955 P.2d 53 (Colo. 1998).
Conduct violating this rule in conjunction with other
disciplinary rules is sufficient to justify suspension. People v.
Schmad, 793 P.2d 1162 (Colo. 1990);
People v. Lopez, 796 P.2d 957 (Colo. 1990);
People v. Watson, 833 P.2d 50 (Colo. 1992);
People v. Boyer, 934 P.2d 1361 (Colo. 1997);
In re Quiat, 979 P.2d 1029 (Colo. 1999);
In re Cohen, 8 P.3d 429 (Colo. 1999).
Conduct violating this rule sufficient to justify suspension.
People v. Vernon, 660 P.2d 879 (Colo. 1982);
People v. Stineman, 716 P.2d 1079 (Colo. 1986).
Conduct violating this rule in conjunction with other disciplinary rules
is sufficient to justify disbarment. People v. McGrath, 833 P.2d 731
(Colo. 1992).
Conduct violating this rule sufficient to justify disbarment.
People v. McGrath, 833 P.2d 731 (Colo. 1992).
Applied in People v. Spiegel, 193 Colo. 161, 567 P.2d 353 (1977);
Jones v. District Court, 617 P.2d 803 (Colo. 1980);
McCall v. District Court, 783 P.2d 1223 (1989).
Cases Decided Under Former DR 5-102.
Law reviews. For article, "Prior Representation: The Specter of
Disqualification of Trial Counsel", see 11 Colo. Law. 1214 (1982).
For article, "The Ethics of Moving for Disqualification of Opposing
Counsel", see 13 Colo. Law. 55 (1984).
For article, "Defending the Federal Drug or Racketeering Charge", see 16
Colo. Law. 605 (1987).
For article, "Ethical Problem Areas for Probate Lawyers",
see 19 Colo. Law. 1069 (1990).
A lawyer cannot act as an advocate on behalf of his client and yet
give testimony adverse to the interests of that client in the same
proceeding. Riley v. District Court, 181 Colo. 90, 507 P.2d 464 (1973).
Prosecution subpoena of accused's attorney may stand. A
prosecutorial subpoena served on a criminal defendant's attorney can
withstand a motion to quash only if the prosecution shows the
following: (1) Defense counsel's testimony will be actually adverse to the
accused; (2) the evidence will likely be admissible at trial; and (3) there
is a compelling need for the evidence which
cannot be satisfied from another source. Williams v. District Court, 700
P.2d 549 (Colo. 1985).
The act of subpoenaing defense counsel is itself the functional
equivalent of a motion to disqualify. Williams v. District Court, 700 P.2d
549 (Colo. 1985).
Test applied in Rodriquez v. District Court, 719 P.2d 699 (Colo. 1986).
Paragraph (A) of this rule relates to potential testimony of a lawyer
during the trial of a matter for which he is presently employed. People
v. Rubanowitz, 688 P.2d 231 (Colo. 1984).
When deputy district attorney was endorsed as witness for prosecution,
disqualification of deputy district attorney was proper, and disqualification
of entire staff of county district attorney's office, under the circumstances,
was not an abuse of discretion.
People v. Garcia, 698 P.2d 801 (Colo. 1985).
Dismissal of charge is not an appropriate remedy.
People v. Garcia, 698 P.2d 801 (Colo. 1985).
Motion to disqualify must set forth specific facts which point to
a clear danger that either prejudices counsel's client or his adversary.
People ex rel. Woodard v. District Court, 704 P.2d 851 (Colo. 1985).
Paragraph (B) does not provide a tool for disqualifying counsel
by the mere stratagem of suggesting that opposing counsel may be called
as a witness during the trial.
People ex rel. Woodard v. District Court, 704 P.2d 851 (Colo. 1985).
Although the Code mandates that an attorney withdraw on the attorney's own
initiative if the attorney violates paragraph (B), there are no provisions in
this rule for the trial court to disqualify attorneys and this rule does not
require a new trial if the attorney does not withdraw. Although plaintiff's
attorneys testified for the defendant, the court found that plaintiff was bound
by his counsel's decision not to withdraw and refused to grant plaintiff a new
trial. Taylor v. Grogan, 900 P.2d 60 (Colo. 1995).
Applied in Jones v. District Court, 617 P.2d 803 (Colo. 1980);
Federal Deposit Ins. v. Isham, 782 F. Supp. 524 (D. Colo. 1992).
Cases Decided Under Former DR 5-104.
Law reviews.
For article, "Why Shouldn't an Attorney Go Into Business With a Client?",
see 13 Colo. Law. 431 (1984).
For article, "Conflicts of Interest",
see 15 Colo. Law. 2001 (1986).
For article, "Update on Ethics and Malpractice Avoidance in
Family Law -- Part I", see 19 Colo. Law. 465 (1990).
For article, "Update on Ethics and Malpractice Avoidance in Family Law --
Part II", see 19 Colo. Law. 647 (1990).
Attorney, with power to act as trustee, who obtains a loan from the trust
through the actual trustee, but does not disclose conflict and does not
discuss security for the loan with the actual trustee, violates this section.
People v. Tanquary, 831 P.2d 889 (Colo. 1992).
Public censure appropriate for lawyer who failed to make full disclosure to client
of their differing interests prior to obtaining her consent for a loan to the lawyer.
People v. Potter, 966 P.2d 1061 (Colo. 1998).
An attorney's conduct in lending money to a client, preparing a promissory note with
an excessive interest rate, and failing to fully disclose his differing interest in the business
transaction constitutes conduct violating this rule. People v. Ginsberg, 967 P.2d 151
(Colo. 1998).
Exploiting a client's friendship and trust to extort funds for one's
personal use is reprehensible conduct deserving of disbarment. People v.
McMahill, 782 P.2d 336 (Colo. 1988).
Lawyer's encouragement of a client to enter into a business transaction
with said lawyer in which the two had differing interests and lawyer's
failure to disclose relevant facts warrant disbarment. People v.
Martinez, 739 P.2d 838 (Colo. 1987),
cert. denied, 484 U.S. 1054, 108 S. Ct. 1003, 98 L.Ed.2d 970 (1988);
People v. Score, 760 P.2d 1111 (Colo. 1988).
Conduct violating this rule in conjunction with other disciplinary rules
is sufficient to justify suspension. People v. Lopez, 796 P.2d 957 (Colo.
1990);
People v. Schubert, 799 P.2d 388 (Colo. 1990);
People v. Sigley, 917 P.2d 1253 (Colo. 1996).
Conduct violating this rule sufficient to justify suspension.
People v. Vernon, 660 P.2d 879 (Colo. 1982);
People v. Foster, 716 P.2d 1069 (Colo. 1986).
An attorney's conduct in borrowing money from his former clients and in
failing to record deeds of trust on their behalf to be used as security
constitutes professional misconduct and justifies his suspension.
People v. Brackett, 667 P.2d 1357 (Colo. 1983).
An attorney's failure to disclose to his clients that he was a lender and
holder of a long-term mortgage on their property and that his interests in
the transaction were necessarily adverse to their
interests constitutes conduct violating this rule sufficient to justify
suspension. People v. Nutt, 696 P.2d 242 (Colo. 1984).
Conduct violating this rule in conjunction with other disciplinary rules
is sufficient to justify disbarment. People v. Broadhurst, 803 P.2d 478
(Colo. 1990);
People v. Rouse, 817 P.2d 967 (Colo. 1991);
People v. Mulligan, 817 P.2d 1028 (Colo. 1991);
People v. Tanquary, 831 P.2d 889 (Colo. 1992).
Conduct violating this rule sufficient to justify disbarment.
People v. Quick, 716 P.2d 1082 (Colo. 1986);
People v. Foster, 733 P.2d 687 (Colo. 1987);
People v. Score, 760 P.2d 1111 (Colo. 1988).
Conduct found to violate disciplinary rules.
People v. Razatos, 636 P.2d 666 (Colo. 1981),
appeal dismissed, 455 U.S. 930, 102 S. Ct. 1415, 71 L.Ed.2d 639 (1982);
People v. Bennett, 810 P.2d 661 (Colo. 1991);
People v. McKie, 900 P.2d 768 (Colo. 1995).
Applied in
People v. Good, 195 Colo. 177, 576 P.2d 1020 (1978); People v. Cameron,
197 Colo. 330, 595 P.2d 677 (1979);
People v. Luxford, 626 P.2d 675 (Colo. 1981);
People v. Barbour, 639 P.2d 1065 (Colo. 1982);
People v. Underhill, 683 P.2d 349 (Colo. 1984);
People v. Stineman, 716 P.2d 1079 (Colo. 1986).
Cases Decided Under Former DR 5-105.
Law reviews. For article, "Conflicts in Settlement of Personal Injury
Cases", see 11 Colo. Law. 399 (1982). For article, "Prior Representation:
The Specter of Disqualification of Trial Counsel", see 11 Colo. Law. 1214
(1982). For article, "The Conflicted Attorney", see 11 Colo. Law. 2589 (1982).
For article, "Some Comments on Conflicts of Interest and the Corporate Lawyer",
see 12 Colo. Law. 60 (1983).
For article, "The Professional Liability Insurer's Duty to Defend -- Part II",
see 15 Colo. Law. 1029 (1986).
For article, "Conflicts of Interest", see 15 Colo. Law. 2001 (1986).
For article, "Conflict of Interest Systems", see 16 Colo. Law 628 (1987).
For article, "Corporate Fiduciary Surcharge Litigation", see 16 Colo. Law. 983 (1987).
For article, "Ethics and the Estate Planning Lawyer", see 17 Colo. Law. 241 (1988).
For article, "Update on Ethics and Malpractice Avoidance in
Family Law -- Part I", see 19 Colo. Law. 465 (1990).
For article, "Update on Ethics and Malpractice Avoidance in Family Law --
Part II", see 19 Colo. Law. 647 (1990).
For article, "Ethical Problem Areas for Probate Lawyers", see 19 Colo. Law.
1069 (1990).
Intent of rule is to guarantee
the independence of counsel from the conflicting interests of other
clients in order to preserve the integrity of the attorney's
adversary role.
Allen v. District Court, 184 Colo. 202, 519 P.2d 351 (1974).
Genuine conflicts of interest must be scrupulously avoided.
Allen v. District Court, 184 Colo. 202, 519 P.2d 351 (1974);
McCall v. District Court, 783 P.2d 1223 (Colo. 1989).
It is of the utmost importance that an attorney's loyalty
to his client not be diminished, fettered, or threatened in any
manner by his loyalty to another client.
Allen v. District Court, 184 Colo. 202, 519 P.2d 351 (1974);
Watson v. District Court, 199 Colo. 76, 604 P.2d 1165 (1980).
Conflict arises where parties would be opposed in subsequent contribution
action.
Where litigants in a negligence action are represented by the same
attorneys, a conflict of interest arises if the plaintiff are considered
opposing parties in the same action for purposes of a
subsequent contribution action, because both parties would want to place a
higher degree of fault on the other party.
National Farmers Union Property & Gas. Co. v. Frackelton, 662 P.2d 1056
(Colo. 1983).
Whenever a motion to withdraw is filed on the grounds that a
conflict of interest may exist or may arise in the future, the trial
judge must conduct a hearing to determine if a conflict of interest,
or a potential conflict of interest, requires that counsel withdraw, and if,
from the facts presented at the hearing, it appears that a substantial
conflict of interest exists, or will in all probability arise in the
course of counsel's representation, the motion to withdraw should
be granted.
Allen v. District Court, 184 Colo. 202, 519 P.2d 351 (1974);
McCall v. District Court, 783 P.2d 1223 (Colo. 1989).
Consent of all parties may be insufficient.
There are certain factual situations where the conflicts of interests
between parties are so critically adverse to one another so as not to
permit the representation of multiple parties by an
attorney, even with the consent of all parties made after full disclosure.
In re King Resources Co., 20 Bankr. 191 (Bankr. D. Colo. 1982).
Attorney should evaluate potential for impropriety.
The attorney should not only inform the parties of the former
representations, but should evaluate for himself, as well as for his
client, any potential for impropriety that might arise.
In re King Resources Co., 20 Bankr. 191 (Bankr. D. Colo. 1982);
People v. Belina, 765 P.2d 121 (Colo. 1988).
It must be "obvious" that attorney can adequately represent clients.
The general rule that a lawyer may represent clients with potentially
conflicting interests with the consent of the clients is qualified in that
it must be "obvious" that he can adequately do so.
In re King Resources Co., 20 Bankr. 191 (Bankr. D. Colo. 1982);
People v. Chew, 830 P.2d 488 (Colo. 1992).
Attorney may represent individual officer of client corporation.
When an individual director or officer of a corporation seeks
representation from an attorney hired by the corporation, the attorney may
serve the individual only if the lawyer is convinced that
differing interests are not present.
In re King Resources Co., 20 Bankr. 191 (Bankr. D. Colo. 1982).
Knowledge of one attorney must be imputed to lawyers with whom he
practices. Osborn v. District Court, 619 P.2d 41 (Colo. 1980).
Imputed disqualification applies to public law firm.
The same rule of imputed disqualification stated in subdivision (D)
of this rule may be considered in determining the ethical standards
for disqualification of a public law firm, such as a district attorney.
People v. Garcia, 698 P.2d 801 (Colo. 1985);
McCall v. District Court, 783 P.2d 1223 (Colo. 1989).
Rule of imputed disqualification applies to public defenders. Allen
v. District Court, 519 P.2d 351 (Colo. 1974); McCall v. District Court, 783
P.2d 1223 (Colo. 1989).
Due to imputed disqualification, appellate division of state public
defender's office must be permitted to withdraw from representing on
appeal a defendant who claims ineffective counsel provided by local deputy
public defender. McCall v. District Court, 783 P.2d 1223 (Colo. 1989).
Disqualification of district attorney's office required
where two former district attorneys are witnesses on contested
issues in case.
Pease v. District Court, 708 P.2d 800 (Colo. 1985).
Trial dates accepted should be honored before withdrawal from employment.
When a public defender or a busy defense lawyer finds that his representation
of one client is inimical to his representation of another client and he
must make an election as to the client he will represent, he has a heavy
duty to the court to see that he honors dates that he has agreed to for
the trial of a case. Watson v. District Court, 199 Colo. 76, 604 P.2d 1165
(1980).
Attorney's compensation may be denied.
Where an attorney is shown to represent more than one party with
conflicting interests, a court may deny him all compensation under a
retainer agreement. In re King Resources Co., 20 Bankr. 191 (Bankr. D. Colo. 1982).
Continued representation of clients with conflicting interests
violates this rule and warrants discipline.
People v. Awenius, 653 P.2d 740 (Colo. 1982).
Public censure is generally appropriate when a lawyer is negligent in
determining whether the representation of a client will adversely affect
another client, causing injury or potential injury to a client. Attorney's
representation of two estates where the beneficiaries of the estates have
conflicting interests and the attorney fails to obtain waivers from the
beneficiaries violates this rule. People v. Gebauer, 821 P.2d 782 (Colo.
1991).
Public censure was appropriate where attorney simultaneously
represented one client in automobile accident case and another client, who
was
involved in the automobile accident, in a bankruptcy proceeding without
listing the accident client as a creditor of the bankruptcy client, and where
aggravating factors existed. People v. Gonzales, 922 P.2d 933 (Colo. 1996).
Public censure warranted where attorney entered into compensated
consulting agreement with law firm to which he referred client's cases, without
full disclosure of agreement to client. People v. Mulvihill, 814 P.2d 805
(Colo. 1991).
An attorney is not always precluded from representing a client in a
transaction with a former or currently inactive client. Whether an
attorney properly may do so depends upon the nature and extent of the former
legal work performed for the previous client as well as the possible
relationship between the two transactions. Crystal Homes, Inc. v. Radetsky,
895 P.2d 1179 (Colo. App. 1995).
Evidence sufficient to justify suspension from the practice of law.
People v. Belfor, 197 Colo. 223, 591 P.2d 585 (1979);
People v. Foster, 716 P.2d 1069 (Colo. 1986).
Three-month suspension appropriate for violation of DR 5-105 (A) and (B)
and DR 5-101 (B). The interests of the client and the client's wife, from whom the
client was then separated, were so adverse, or potentially adverse, that the conflicts could not
be waived even had there been full disclosure. As such, it was not obvious that the attorney
could represent the client, the client's estranged wife, and their children in the client's
bankruptcy proceedings. Because the attorney knew of the conflicts involved when he
undertook the multiple representation, a short period of suspension is warranted, but not the
requirement of reinstatement proceedings. In re Quiat, 979 P.2d 1029 (Colo. 1999).
Forty-five-day suspension appropriate for violation of this rule where
pattern of misconduct and multiple offenses are factors in aggravation. People
v. Chew, 830 P.2d 488 (Colo. 1992).
Conduct violating this rule in conjunction with other disciplinary
rules is sufficient to justify public censure.
People v. Odom, 829 P.2d 855 (Colo. 1992);
People v. Stevens, 883 P.2d 21 (Colo. 1994);
People v. Vsetecka, 893 P.2d 1309 (Colo. 1995);
People v. Wollrab, 909 P.2d 1093 (Colo. 1996).
Public censure appropriate where attorney represented buyer and seller of
restaurant and did not properly advise the buyer or protect the buyer's
interest. People v. Odom, 829 P.2d 855 (Colo. 1992).
Conduct violating this rule sufficient to justify public censure.
People v. Gebauer, 821 P.2d 782 (Colo. 1991).
Conduct violating this rule in conjunction with other disciplinary rules
is sufficient to justify suspension.
People v. Lopez, 796 P.2d 957 (Colo. 1990);
People v. Hansen, 814 P.2d 816 (Colo. 1991);
People v. Watson, 833 P.2d 50 (Colo. 1992);
People v. Butler, 875 P.2d 219 (Colo. 1994);
People v. Banman, 901 P.2d 469 (Colo. 1995);
People v. Miller, 913 P.2d 23 (Colo. 1996);
People v. Silver, 924 P.2d 159 (Colo. 1996);
In re Cohen, 8 P.3d 429 (Colo. 1999).
Conduct violating this rule sufficient to justify disbarment.
People v. Quick, 716 P.2d 1082 (Colo. 1986);
People v. Martinez, 739 P.2d 838 (Colo. 1987),
cert. denied, 484 U.S. 1054, 108 S. Ct. 1003, 98 L.Ed.2d 970 (1988).
Conduct found to violate disciplinary rules.
People v. Razatos, 636 P.2d 666 (Colo. 1981),
appeal dismissed, 455 U.S. 930, 102 S. Ct. 1415, 71 L.Ed.2d 639 (1982).
Applied in
People ex rel. MacFarlane v. Boyls, 197 Colo. 242, 591 P.2d 1315 (1979);
People v. Meldahl, 200 Colo. 332, 615 P.2d 29 (1980);
People v. Castro, 657 P.2d 932 (Colo. 1983);
People v. Underhill, 683 P.2d 349 (Colo. 1984);
People v. McDowell, 718 P.2d 541 (Colo. 1986).
Cases Decided Under Former DR 5-107.
Law reviews. For article, "Conflicts in Settlement of Personal Injury
Cases", see 11 Colo. Law. 399 (1982).
For article, "Conflicts of Interest", see 15 Colo. Law. 2001 (1986).
For formal opinion of the Colorado Bar Association Ethics Committee on
Collaboration with Non-Lawyers in the Preparation and Marketing of Estate
Planning Documents, see 19 Colo. Law. 1793 (1990).
Applied in People ex rel. MacFarlane v. Boyls, 197 Colo. 242,
591 P.2d 1315 (1979).
|
