You and your spouse decide you want a divorce. You each seek out a New Jersey divorce attorney without sharing with each other your selection. Everything seems fine as you continue to confide in your attorney and tell him or her what your personal goals are after the divorce is over. Then it hits you. Not only do you find out you’ve been sharing your attorney, but with none other than your soon to be ex. While this situation definitely sounds wrong and is unethical in the eyes of the law, attorneys sometimes take risks and wind up in these situations. In a recent piece I discussed the case of Guglielmo v. Guglielmo, yet in regards to modifying property settlement agreements. In addition to that key aspect of the case, Guglielmo is a great example, and one of the few published cases, that illustrates this attorney-client conflict of interest. Let’s explore.
In Guglielmo, the parties were divorced on March 11, 1982. They entered into a property settlement agreement, which addressed issues of custody, child support, equitable distribution and attorney’s fees. A year later on June 30, 1983, an amendment was added to the original settlement agreement, which allowed for the sale of the marital home along with equal division of the net proceeds and outstanding financial obligations to be assumed by the defendant. In October of 1988, the plaintiff moved for post-judgment relief and reformation of the settlement agreement based upon “allegations of mistake, overreaching and fraud, proportional allocation of the defendant’s IRA, and return of monies, which the plaintiff lent to the defendant after the divorce.” The defendant cross-moved against the plaintiff, claiming that she delayed in selling the marital home.
The initial motion judge found for the defendant, stating that neither the settlement agreement nor its amendment was invalid or unconscionable. Additionally, the judge preliminarily denied the plaintiff’s motion to reform the settlement agreement. She reserved the decision on the issue of modification of the agreement, among others, and fixed a date for the defendant to pay the plaintiff monies due on an order from December 1988. The next judge, Judge Herr, extensively looked at New Jersey divorce case law and held that although courts are supposed to presume that settlement agreements are valid, an agreement can be set aside if it is a product of fraud or seems to be unconscionable to one party.
After looking at the totality of the circumstances, the judge concluded that the plaintiff was indeed being treated unfairly and inequitably. She was not only the victim of unfair dealing at the hands of the defendant, but also received poor advice from her attorney, who happened to represent the defendant as well, creating a clear conflict of interest. The judge particularly looked to the conflict of interest issue. She looked to the New Jersey's Rules of Professional Responsibility, in particular Rule 1.7, conflicts of interest for current clients. Importantly, the rule states that a lawyer shall not represent a client if (1) that representation will be directly adverse to another client, and (2) there is a significant risk that representing one client will be materially limited by the attorney’s responsibility to the other client.
The rule also lays out situations in which it is ok for a lawyer to take on cases involving current clients. Those situations are: (1) if the lawyer believes he or she can provide competent and diligent representation to both of the clients; (2) if the representation is not forbidden by the law; (3) if the representation doesn’t involve one client against the other in the same litigation; and (4) if the both parties give informed consent, confirmed in writing..
In this case, the attorney should not have represented both the plaintiff and defendant in drafting the property settlement agreement, as it clearly was biased toward the defendant. The attorney knew that representing both parties created a conflict of interest. Furthermore, the representation did not fall under one of the exceptions to the rule. Particularly, the rule states that a lawyer cannot represent adverse parties in litigation even with consent. This was clearly the case here as the lawyer was representing both plaintiff and defendant in a lawsuit requesting a divorce.
This case is definitely noteworthy as it highlights what can happen when a lawyer does not uphold his or her ethical standards. At the Law Offices of Edward R. Weinstein, we take ethics very seriously and ensure that each and every one of our clients will be treated with the utmost competence and diligence. Thank you.