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ETHICS

Greg Fayard is Counsel with Klinedinst

The Ethical Lawyer, Rule 3-310(C)

PC’s Sacramento office. He may be reached at gfayard@klinedinstlaw.com. Betsy S. Kimball is a certified specialist in legal malpractice law and the Editor of this publication.

Avoid Potential Pitfalls of Joint Representation of Clients by Greg Fayard and Betsy S. Kimball Pick the correct answer.

Quiz

1.

I do not have to comply with Rule of Professional Conduct 3-310(C) unless there is some actual conflict about the case between or among my jointly represented clients.

2. As long as my jointly represented clients agree on everything about the case now and I do not see any likelihood that they will disagree in the future, I do not have to comply with rule 3-310(C). 3. Every time I jointly represent clients in the same matter, I must comply with rule 3-310(C).

Rule of Professional Conduct 3-310 states in pertinent part: “(C) A member shall not, without the informed written consent of each client: (1) Accept representation of more than one client in a matter in which the interests of the clients potentially conflict; or (2) Accept or continue representation of more than one client in a matter in which the interests of the clients actually conflict; or ….” The comment to the rule is more explicit: “Subparagraphs (C)(1) and (C)(2) are intended to apply to all types of legal employment, including the concurrent representation of multiple parties in litigation or in a single transaction or in some other common enterprise or legal relationship. Examples of the latter include the formation of a partnership for several partners or a corporation for several shareholders, the preparation of an ante-nuptial agreement, or joint or reciprocal wills for a husband and wife, or the resolution of an ‘uncontested’ marital dissolution.”1 Based upon the text of the rule and especially on the comment, the correct answer to the quiz is # 3. As a practi-

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cal matter, in 99 percent of joint client representations, there is the potential for conflict in the jointly represented clients’ interests, no matter how much they profess their love for each other, want exactly the same thing, etc., at the time that they retain the attorney. Historically, not a lot of attention has been paid to rule 3-310(C), although any legal malpractice lawyer would say non-compliance creates a problem in defending a breach of fiduciary duty claim against the now former lawyer by one of the now former jointly represented clients. The Rules—while not creating civil causes of action2—do conclusively set the fiduciary duties of an attorney, according to multiple courts.3 But now, the days of benign neglect to and of rule 3-310(C) are over. The Bar has long had “sample fee agreements” available in pdf and Word.4 In late July 2015, the Bar added to the “optional clauses” portion of its sample fee agreements a “Joint/Multiple Client Disclosure and Consent Form.” By mid-August 2015, the Bar had taken down that form. Sooner or later, it is likely to replaced with a new form. The Bar’s attention to this issue is the first “clue” that rule 3-310(C) enforcement is no longer a sleeper. Another is the recent experience of an in-house lawyer who represented his employer in defending a FELA case and simulta-

SACRAMENTO LAWYER | September/October 2015 | www.sacbar.org

neously represented employee Yanez, a co-worker of the injured man, at his (Yanez’s) deposition in the FELA case.5 The case is worth a careful read. Yanez, a mechanic, had been working with the FELA plaintiff at the time of the plaintiff’s injury. Prior to his deposition in the FELA case, Yanez told the attorney that he feared his testimony would be unfavorable to the employer and asked the attorney who would “protect” him. With the benefit of hindsight, that was a “red flag” for the attorney (recall: inhouse defense counsel for the employer); but the attorney told Yanez that he was Yanez’s attorney for the deposition and that, as long as Yanez told the truth in the deposition, his job would not be affected.6 Yanez was eventually fired, at least in part based upon the testimony that he gave at his deposition. He then sued both his employer for wrongful discharge and the attorney for legal malpractice, breach of fiduciary duty, and fraud.7 The attorney successfully moved for summary judgment on the ground that he did not cause Yanez’s termination. The Court of Appeal, Third Appellate District, reversed, finding a triable issue of fact that, but for the attorney’s alleged malpractice, breach of fiduciary duty and fraud, Yanez would not have been terminated.8 The court explained that

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