April 23, 1996
A lawyer who was appointed by the court as a special master and issued a report regarding findings and recommendations, may subsequently represent one of those parties in a legal malpractice action against a lawyer who participated in the prior proceeding, where the two matters are not the same and the special master did not receive any information while acting as the special master that was not generally known or readily available by other means.
References: MRPC 1.11(a), 1.12; JI-34; RI-227.
A husband and wife were divorced in 1991. The wife was represented in the divorce and in subsequent post-judgment proceedings by Lawyer A. As part of the judgment of divorce, the wife received a cash settlement which was secured by various collateral including a one-half interest in certain real property. The real property was encumbered by a first mortgage of approximately $95,000. In 1993, ex-husband asked ex-wife to subordinate her interest in the real property so that he could obtain additional working capital for his business. The ex-wife, while still represented by Lawyer A, agreed to the subordination in the amount of $285,000, if the first mortgage was paid off out of the proceeds of the second mortgage. Thus, ex-wife would be second in priority only to the new mortgage holder.
The order amending the judgment of divorce and permitting the subordination was not entered in a timely fashion, nor was the second mortgage holder informed of the parties' agreement that the first mortgage was to be paid with a portion of the proceeds of the second mortgage. Ex-husband did not pay off the first mortgage and that mortgage remains as a lien on the real property, along with the second mortgage. Therefore, there is an additional $95,000 superior lien on the property that allegedly would not have existed if Lawyer A had entered the order in a timely fashion.
In 1994, ex-husband sought to reduce alimony payments to ex-wife. The inquirer was appointed by the court to act as a special master to advise the court regarding the financial condition of ex-husband's business, his ability to pay alimony, and the protection of ex-wife's alimony and property settlement. The inquirer subsequently filed a report as the special master. The report referenced the order subordinating ex-wife's lien, but the inquirer has indicated that no independent investigation was undertaken or recommendation made regarding ex-wife's interest in the real property, the effect of the subordination agreement on the lien, or Lawyer A's conduct in that regard.
In late 1995, the inquirer was contacted by ex-wife's conservator (ex-wife has become a legally incapacitated person), who wishes to retain the inquirer to pursue a legal malpractice action against Lawyer A for alleged negligence in failing to protect ex-wife's position in the real property. The inquirer asks whether the representation would be permitted.
While a number of rules of professional conducrt are implicated by this unquiry, none of them prohibit the repersentation which is contemplated. MRPC 1.12 is most directly applicable to the situation described. The Comment to the rule defines the term "adjudicative officer" as including special masters. In relevant part, MRPC 1.12 states:
"(a) Except as stated in paragraph (d), a lawyer shall not represent anyone in connection with the matter in which the lawyer participated personally and substantially as a judge or other adjudicative officer, arbitrator, or law clerk to such a person, unless all parties to the proceeding consent after consultation."
It is clear that as the special master, the inquirer "participated personally and substantially" in the post-judgment proceeding. This phrase was explained in JI-34 as follows:
"Personal and substantial participation in a matter means being personally involved to an important, material degree. Determination of what constitutes 'personal and substantial participation' depends on the context, and need not involve a determination on the merits of the matter, direct contact with witnesses, parties or their attorneys, or actual appearance before a tribunal."
Despite the inquirer's personal and substantial participation, MRPC 1.12 does not prohibit the proposed representation, because the post-judgment proceeding and the contemplated legal malpractice against Lawyer A are different matters. The elements required to prove the malpractice against Lawyer A are unrelated to the issues raised before the special master, i.e., the ex-husband's ability to pay alimony. See, e.g., Meyer v. Foti, 720 F Supp 1234 (MD La 1989). Because the divorce and post-judgment proceedings on the one hand, and the proposed malpractice action on the other, are not the same matters, MRPC 1.12 does not prohibit the inquirer's representation of a conservator, and the consent of the ex-husband is not required.
MRPC 1.11(a) states:
"(a) Except as law may otherwise expressly permit, a lawyer shall not represent a private client in connection with a matter in which the lawyer participated personally and substantially as a public officer or employee, unless the appropriate government agency consents after consultation . . . ."
Is representation on the malpractice matter "in connection with" the special master proceedings? On the one hand, it could be argued that the matters are not "connected." The correctness of the decisions made in the court case by the special master have no bearing on decisions in the prospective malpractice suit. The elements needed to prove malpractice are unrelated to the elements needed to resolve alimony and property settlement questions. The conduct in question in the malpractice case is that of Lawyer A, who was not a party in the property settlement matter. The facts provided indicate that although the special master's report referenced the lien, no independent investigation was undertaken or recommendation made regarding ex-wife's interest in the real property, the effect of the subordination agreement on the lien, or Lawyer A's conduct in that regard. We also note that the purpose of MRPC 1.12 is to address the side effects of client loyalty when government lawyers change employment. There is no issue of "client disloyalty" in the prospective representation that merits the imposition of disqualification.
On the other hand, the malpractice claim clearly arises out of the divorce action, including the post-judgment property settlement over which the special master presided. It is possible that information available in the court case will be relevant to the malpractice case, such as dates of lien filings or the lack thereof, Lawyer A advising on the subordination of a property interest and failing to secure it. The inquirer certainly brings special knowledge to the malpractice matter that the inquirer would not possess but for duties as a special master. Although the special master performed no independent investigation regarding the lien, the special master undoubtedly listened to arguments of the advocates, including Lawyer A, and based a decision on the purported fairness of the settlement and agreement of the parties. And finally, if malpractice is proved, is the property settlement considered by the special master attachable by ex-wife?
A discussion in ABA Op 342, addressing ABA Model Code of Professional Responsibility DR 9-101(B), the precursor to MRPC 1.12, provides some guidance:
"Although a precise definition of 'matter' as used in the [Rule] is difficult to formulate, the term seems to contemplate a discrete and isolatable transaction or set of transactions between identifiable parties. Perhaps the scope of the term 'matter' may be indicated by examples. The same lawsuit or litigation is the same matter. The same issue of fact involving the same parties and the same situation or conduct is the same matter. By contrast, work as a government employee in drafting, enforcing or interpreting government or agency procedures, regulations, or laws, or in briefing abstract principles of law, does not disqualify the lawyer under [the Rule] from subsequent private employment involving the same regulations, procedures, or points of law; the same 'matter' is not involved because there is lacking the discrete identifiable transactions or conduct involving a particular situation and specific parties."
The facts of this case are distinguished from those present in RI-227, which involved a lawyer who had been appointed guardian ad litem by the probate court and who, in that capacity, rendered an independent report concerning the care of a ward, and who was prohibited from subsequently representing another family member in an effort to adopt the ward. In RI-227, it was assumed that the lawyer had received confidential information which was materially adverse to the other family member, because the lawyer's independent report concluded that the person best suited to provide care for the ward was someone other than the family member who sought the adoption. Here, the inquirer did not receive any confidential information in the role as special master.
This dilemma need not be solved in this particular case, since MRPC 1.12(a) allows the parties in the former matter to give consent to the representation. The conservator who acts for ex-wife has already given consent. Since the proposed malpractice action does not negatively impact ex-husband, there is some probability of obtaining his consent. The consent of Lawyer A is not required.
The proposed representation is not prohibited if the conservator and the ex-husband consent.