The Florida Bar
PROFESSIONAL ETHICS OF THE FLORIDA BAR
June 21, 1971
June 21, 1971
An attorney may represent a current client against a former client if the current matter is unrelated to the prior matters and if no confidences material to the current representation obtained in the prior representation. The mere fact that a bank's attorney's fee for handling a loan transaction was charged to the borrower does not preclude the bank's attorney from representing the bank in a subsequent suit on the promissory note.
CPR: DR 5-107
Chairman Massey stated the opinion of the committee:
An inquiring attorney represents a commercial bank which has litigation against an individual and corporations of which the individual is either stockholder, officer, director, or general manager. The litigation involves promissory notes and security agreements drafted by the inquirer's law firm but for which the fee was an expense paid by the borrower. As to the corporate obligations, the individual executed guarantees in connection therewith. One corporation is involved because it is alleged to be the alter ego of a borrowing corporation although it is not an obligor on the note.
Opposing counsel in this litigation raised a question as to the propriety of the inquirer representing the bank. It now appears the individual and at least one of the corporations are bankrupt and the bank desires the inquirer to hotly pursue the matter in bankruptcy court. The inquirer apparently did handle certain transactions which were related to the individual, but said transactions were limited and unrelated to matters involved in the mentioned litigation. The other transactions were review and negotiation of three leases for an entirely separate corporation; making effort to purchase some property for the separate corporation; referring a personal injury case involving the individual's son; and defending a separate corporation on a breach of lease suit. There apparently was no knowledge given or available (nor involved in the named representations) to the inquirer or his firm which would adversely affect the individual or the corporate defendants of the bank litigation. Communication in writing has been addressed to the inquirer by the individual objecting to his representation of the bank.
The inquirer's concern extends beyond the immediate problem to those loan transactions his firm handles for the bank which later result in litigation when the fee has been charged to the borrower, as is the normal course of business procedure.
Assuming the non-acquisition of confidential information in the other specified representations, which information would be material to the existing litigation, there is no conflict or impropriety in the inquirer's conduct in behalf of the bank in the existing litigation and bankruptcy proceedings. Beyond this, if there has been no relation between the inquirer and a proposed defendant in a promissory note suit or like litigation excepting the payment of the fee by the borrower-defendant, there is absolutely no conflict or impropriety involved. Such proposed representation does not contravene DR 5-107 or the ethical considerations applicable thereto.