In re Chase

68 N.J. 392, 346 A.2d 89 (1975)

 

RULE:

N.J. Ct. R., Code Prof. Conduct DR 5-105(A) requires a lawyer to decline employment if the exercise of his independent professional judgment in behalf of a client will or may be adversely affected by such employment, except as allowed under (C). Paragraph (B) of the rule proscribes continuance of multiple employment in the same circumstances. Paragraph (C) reads that in situations covered by DR 5-105(A) and (B) except as prohibited by rule, opinion, directive or statute, a lawyer may represent multiple clients if he believes that he can adequately represent the interests of each and if each consents to the representation after full disclosure of the facts and of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each. 

FACTS:

Respondent attorney loaned funds he was to invest for one client, without that client's consent, to another client, who was to make monthly installment payments. The clients demanded their money after consistent late payments, and respondent was delayed in restoring the funds. The ethics committee filed a complaint against respondent for violating N. J. Ct. R., Code Prof. Conduct DR 5-105(c) and improperly representing two of his clients in a loan transaction between them, placing himself in an unethical conflict of interests situation. The court held that respondent was in violation of DR 5-105 (c) since he could not had reasonably believe that he could adequately represent the interests of each client.

ISSUE:

Did respondent violate  N.J. Ct. R., Code Prof. Conduct DR 5-105(c) in that he improperly represented two of his clients in a loan transaction between them, thereby placing himself in an unethical conflict of interests situation?

ANSWER:

Yes.

CONCLUSION:

The court considered respondent's unblemished record, and severely reprimanded him for his plain and patent violation of DR 5-105 (c). He wrongfully represented two of his clients in a loan transaction between them, creating a conflict of interest since he could not adequately represent the interests of each client.

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