The Florida Bar
PROFESSIONAL ETHICS OF THE FLORIDA BAR
February 27, 1970
February 27, 1970
When a suit in which a corporation and its principal are defendants is consolidated with a related suit in which one is plaintiff and one is joined as a necessary defendant, a lawyer may represent both the corporation and the principal in the consolidated litigation if their interests are not actually or potentially differing and the court is advised.
A member of The Florida Bar poses the following inquiry:
Sometime ago, the undersigned, on behalf of a private client, formed a corporation for the purpose of engaging in the operation of a restaurant and liquor lounge. Subsequent to the formation of the corporation, the undersigned, together with another attorney and a third party, constituted the Board of Directors of such corporation.
The individual client for whom the corporation was formed leased a piece of improved property under the terms which permitted him to make extensive improvements thereon, and for which the lessor agreed in such lease to give the client a mortgage for such improvements.
The lease for the operation of the restaurant and lounge upon such property was transferred to the corporation; thereafter difficulties concerning the mortgage arose between the individual client and the lessor.
Because of an alleged nonpayment of rent by the individual client, the lessor commenced an eviction proceeding in the Civil Court of Record, and after motions, joined the corporation as a party Defendant. Shortly after the commencement of the eviction proceeding, the individual client, through other counsel, commenced an action to foreclose the mortgage. The same attorney, not the undersigned, represented both the individual and the corporation in the eviction proceeding, and also represented the individual in the mortgage foreclosure action. The corporation was joined as a party Defendant, and I appeared on behalf of the corporation in the mortgage foreclosure action.
By Order, the eviction proceeding has been consolidated with the mortgage foreclosure action in the Circuit Court.
The attorney who represented both Defendants in the eviction proceeding (the corporation and the individual) and who also represented the individual Plaintiff in the mortgage foreclosure proceeding, has been dismissed as counsel, and both the corporation and the individual have requested that I undertake to represent the individual and the corporation in the consolidated actions.
My question is whether it is ethical for me to represent both the Plaintiff and one of the Defendants which has been joined as a party Defendant by necessity under the circumstances outlined above if I receive written authorization from both the corporation and the individual client. Please be advised that I have properly resigned as an officer and director of the corporation some few months ago, and the other attorney who was also an officer and director of said corporation (and who was also attorney of counsel in the proceedings) has also withdrawn.
Assuming that the interest of the two clients are not actually or potentially differing, and recognizing that an appropriate informed consent will be procured, we see no ethical objection to the representation. The Court, of course, should be advised appropriately. Because of the unique nature of this situation, we think it advisable for the attorney to exercise extreme caution in ascertaining the possibility of any conflict of interest, and appropriate diligence in making a complete disclosure of all pertinent facts to the two clients in anticipation of the procurement of the consent.