May 8, 1998
A lawyer is not per se prohibited from simultaneously representing a county and other municipalities and/or the contracted assessors in property tax assessments and appeal matters.
The multiple potential conflicts, originating from the statutory obligations of the parties and their relationship on a variety of other intergovernmental issues, urge great caution by the lawyer in considering such dual representation.
References: MRPC 1.7, 1.8; MCL 211.10(d)(6) and 211.34(3); MSA 7.52(3).
A County Department of Corporation Counsel has made inquiry concerning conflicts that may arise from the dual representation of the county and other local governmental units (cities and townships) in property tax assessments and appeal matters.
State law requires that municipalities annually assess both real and personal property within their localities for purposes of levying taxes. To accomplish this, state law further requires that municipalities employ certified assessors to perform such functions. Many of the municipalities within the county do not employ certified assessors, but rather contract with the county to provide certified assessors for this valuation assessment (See MCL 211.10(d)(6) and 211.34(3); MSA 7.52(3)). The state tax commission and attorney general have concluded that the use of county equalization personnel to perform both equalization responsibilities for the county and contractual assessment obligations with local municipalities is not incompatible.
The department of corporation counsel for the county normally represents and defends county employees, including the board of commissioners and certified assessors in challenges to their governmental decision making and duties. In the assessment process, the county board of commissioners has a legal obligation to review and re-evaluate assessments of all municipalities in the county. Significantly, the county's and the municipality's interests are not always aligned.
First, in accordance with their statutory obligation, a county board of commissioners may disagree with and adjust certain assessments of a given municipality (MCL 211.34; MSA 7.52). Second, even in the absence of adjustment, there may be differences between the county and the municipality as to legal strategies and approaches to defending a taxpayer's assessment appeal, settlement parameters, responses to settlement offers and appeals from adverse decisions beyond the tax tribunal. Third, the rules of the state tax tribunal permit various governmental taxing units (counties, local school districts, community college districts) to intervene in matters before the tax tribunal and present their own separate position on assessments. In other words, both the county and municipality may appear as separate parties before the tax tribunal.
Complicating this inquiry are the numerous other legal, contractual and financial arrangements between the county and many of the municipalities for other county related and/or sponsored services. These include sheriff's department road patrol services, gypsy moth control programs, municipality election canvassing contracts, local police department equipment leases, etc.) In certain circumstances, these intricate relationships may include shared E-911 systems, contracts pertaining to solid waste management and flow control and regional land-use planning and regulation. In all such contracts, the county department of corporation counsel represents only the county's interests in both the negotiations on any such contracts and/or in any possible contract dispute.
Furthermore, the department of corporation counsel also would be directly involved in negotiating any possible "Equalization Division Services" contract, which might also provide the legal representation of these same municipalities in tax appeal matters. This would create a situation whereby the initial negotiation of this contract would require this office to seek the fullest legal and risk protections and cost advantage to the possible benefit of the county and to the possible detriment of the municipality.
Whether, given these circumstances, the lawyer may represent both the county and the municipality in property tax assessment and appeal matters is governed by MRPC 1.7 which states:
"(a )A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
"(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
"(2) each client consents after consultation.
"(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests unless:
"(1) the lawyer reasonably believes the representation will not be adversely affected; and
"(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved."
"Paragraph (a) prohibits representation of opposing parties in litigation. Simultaneous representation of parties whose interests in litigation may conflict, such as coplaintiffs or codefendants, is governed by paragraph (b). An impermissible conflict may exist by reason of substantial discrepancy in the parties' testimony, incompatibility in positions in relation to an opposing party, or the fact that there are substantially different possibilities of settlement of the claims or liabilities in question." See Comment, MRPC 1.7.
Quite clearly, if the county department of corporation counsel determines that an impermissible conflict of interest exists before the representation is undertaken, the representation should be declined. In a dual representation situation like that presented, analysis under MRPC 1.7(b) is appropriate, as opposed to MRPC 1.7(a).
"loyalty to a client is also impaired when a lawyer cannot consider, recommend, or carry out an appropriate course of action for the client because of the lawyer's other responsibilities or interests. The conflict in effect forecloses alternatives that would otherwise be available to the client. Paragraph (b) addresses such situations. A possible conflict does not itself preclude the representation. The critical questions are the likelihood that a conflict will eventuate and, if it does, whether it will materially interfere with the lawyer's independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of the client." See Comment, MRPC 1.7. Emphasis added.
Minimally, MRPC 1.7(b) requires the lawyer to engage in this analysis prior to accepting the representation of the municipality. If the lawyer reasonably concludes that there is likelihood that the representation would be materially limited, then by necessity, the representation would be adversely affected and the lawyer may not ask the client for consent and the representation must be declined.
MRPC 1.7(b) contemplates that the client may consent only to the potential for a conflict, which may result in a materially limited representation. If such a conflict is likely or certain to occur, the representation should be declined; or, if the conflict does occur after the representation begins, then the lawyer must withdraw.
As a general proposition, a lawyer is not per se prohibited from simultaneously representing a county and other municipalities and/or the contracted assessors in property tax assessments and appeal matters. Each such fact scenario should be examined on a case-by-case basis.
However, with specific reference to the facts presented, the multiple potential conflicts, originating from the statutory obligations of the parties and their relationship on a variety of other intergovernmental issues, urge great caution in considering dual representation under these or other similar circumstances.
Given the county's (i.e. the board of commissioners) need to have unfettered, independent legal advice on assessment and appeals matters (and the other substantial legal matters implicating the county and the other municipalities) and the inherent political nature of commissioners' actions, it is difficult to conceive of a situation in which a disinterested lawyer could confidently and reasonably believe that the lawyer's obligations to the county will not adversely affect the representation of the municipality, and vice versa.
Coincidental alignment of legal interests between the county and municipality should not dictate the lawyer's decision over ethical obligations running from the proposed dual representation. Certainly, if such dual representation occurs, there are further ethical considerations that will apply to the representation, including MRPC 1.8 governing use of client confidences, etc.