Gray v. Commercial Union Ins. Co.

191 N.J. Super. 590, 468 A.2d 721 (Super. Ct. App. Div. 1983)

 

RULE:

The "substantial relationship" standard for purposes of a motion to disqualify counsel should not be read in a mechanical or overly technical manner. The requirement of substantial relationship of issues is satisfied where the adversity between the interests of the attorney's former and present clients has created a climate for disclosure of relevant confidential information. Therefore, if the prior representation was of a type that would give the appearance that the lawyer learned and has reason to disclose his former client's confidences, the lack of identity between the cases will not pose a barrier to disqualification.

FACTS:

Defendant Commercial Union Insurance Company (Commercial Union) appeals from an order of the Law Division that denied its motion to disqualify Robert F. Colquhoun (Colquhoun) and the firm in which he is a member from representing plaintiff Frederic S. Gray (Gray) in this matter. Commercial Union contends that Colquhoun is barred from representing Gray by DR 4-101 and DR 5-105 of the Disciplinary Rules of the Code of Professional Responsibility of the American Bar Association. 

Colquhoun, a member of the New Jersey bar, was retained and employed by Commercial Union from 1961 through the time of this matter. With one exception, each retention and employment involved defending Commercial Union's insureds in personal injury litigation. The one exception was a case in which Colquhoun represented Commercial Union directly in a lawsuit against another insurance company, which had sought to hold Commercial Union liable as an excess insurer. The parties dispute the extent of Colquhoun's access to Commercial Union's confidences during this period. Commercial Union's assistant in-house counsel maintains that Colquhoun worked regularly with company officials in its West Orange and Livingston, New Jersey offices. It is asserted that in this position Colquhoun "was privy to confidential and proprietary information of [Commercial Union], including its claims and litigation philosophy and its methods and procedures in handling and defending claims and litigation, and had access to individuals and information regarding the administration of various of defendant's business operations."

In this action Gray, the New Jersey regional claims manager, charges that Commercial Union breached his contract of employment by engaging in a "planned and settled scheme" to deprive him and other senior employees of their future and benefits and by discharging him without cause. 

ISSUE:

 Was it unethical for a lawyer to represent plaintiff where the lawyer concurrently represented defendant on other matters, even if the two representations were unrelated?

ANSWER:

Yes.

CONCLUSION:

The court held the attorney and the firm were barred under N.J. Ct. R., Code Prof. Conduct DR 4-101 and 5-105 from representing plaintiff. The court reasoned that the attorney had an attorney-client relationship with defendant where the attorney represented both defendant and the insured and owed a duty to each to preserve confidences. The court found there was a substantial relationship between the subject matter of the present matter and prior representation where the adversity between the interests of the parties created a climate of disclosure of relevant information. The court noted the attorney represented defendant for over 20 years and had access to information regarding defendant's business operations. The court found that under DR 5-105 it was unethical for the lawyer to represent plaintiff where the lawyer concurrently represented defendant on other matters, even if the two representations were unrelated.

Click here to view the full text case and earn your Daily Research Points.