When a client's collection matter has gone dormant for years, can the firm take a new case against that same client?

Plain-English summary

A firm was asked to associate with another firm in a personal-injury suit, but a member of the firm represented the defendant in that suit on an old collection matter: judgments obtained and recorded in 1988 and 1989, with no client contact in at least 18 months and little likelihood the judgments would ever be recovered. The firm wanted to take the personal-injury case and stop handling the old judgments.

The Disciplinary Commission concluded the firm may represent the personal-injury client against the collection client, because the dormant file relegated the collection client to former-client status. The opinion explained that the line between former-client conflicts and simultaneous-representation conflicts matters because litigation against a present client is generally and absolutely prohibited regardless of the relationship between the two matters, quoting Wolfram's Modern Legal Ethics and citing Cinema 5, Ltd. v. Cinerama, Inc. The question was whether, absent affirmative action to terminate, the collection client stayed a "current client" as long as the judgment remained uncollected; the Commission concluded it did not. Although returning the judgment and closing the matter would be neater practice, that is not the only way a client becomes a former client: a current client may become a former client when the subject matter of the representation is dormant and there is a reasonable likelihood it will remain so.

Applying that standard, the Commission found the recorded 1988-1989 judgments, the 18-month lack of contact, and the slim chance of recovery analogous to Abbott Laboratories v. Centaur Chemical Company, where a roughly eleven-month gap and little more than a possibility of continued representation let the lawyer take on the former adversary. Under Rule 1.9, the firm could represent the personal-injury client against the now-former collection client so long as the matters were not substantially related and information from the prior representation was not used against the former client.

Currency note

This opinion was issued in 1992, before the 2002 Ethics 2000 revisions to the ABA Model Rules of Professional Conduct and Alabama's subsequent amendments to its Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Does a client stay a "current client" as long as an uncollected judgment sits open?

A: Per the opinion, no. The Commission concluded a current client may become a former client when the matter is dormant and reasonably likely to remain so, even without a formal closing letter.

Q: What made the collection client a former client here?

A: The opinion pointed to the 1988-1989 recorded judgments, at least 18 months without contact, and the firm's statement that the judgments were unlikely ever to be recovered.

Q: What conditions did Rule 1.9 attach to suing the former client?

A: The opinion stated the firm may proceed so long as the new matter is not substantially related to the old one and information from the prior representation is not used to the former client's disadvantage.

Background and rules framework

The opinion interprets Rule 1.9 (Model Rule 1.9, duties to former clients) of the Alabama Rules of Professional Conduct, distinguishing it from the stricter current-client rule of Rule 1.7 and addressing when dormancy converts a current client into a former client.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.9 / Ala. R. Prof. C. 1.9 (duties to former clients; substantial relationship; use of information)
• Model Rule 1.7 / Ala. R. Prof. C. 1.7 (current-client conflicts, contrasted)

Cases:

• Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir. 1976), strict bar on suing a present client
• Abbott Laboratories v. Centaur Chemical Co., 497 F. Supp. 269 (1980), gap in representation allowed adverse later representation

See also

• AL Ethics Op. 1991-42: suit against a former client
• AL Ethics Op. 1992-21: representing a new client adverse to a current client

Source

• Landing page: https://www.alabar.org/office-of-general-counsel/formal-opinions/1992-15/
• Original PDF: https://www.alabar.org/assets/2019/02/RO-92-15.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

ETHICS OPINION

RO-92-15

QUESTION:

"This is to confirm our recent conversations by telephone regarding the discussions of the possible conflict of interest that may have arisen in one of this Firm's cases. An outline of the facts at present are as follows:

My law firm has recently been asked to associate with another law firm in a personal injury suit. However, a member of my firm represents the Defendant in the personal injury suit regarding a collection matter. Judgments have been obtained by my partner and recorded. The judgments were recorded in 1988 and 1989. The firm has had no contact with the client in at least 18 months. My firm would like to take the personal injury suit and no longer handle the old judgments which are not likely to ever be recovered."

ANSWER:

You may represent the personal injury client against the former client in the collections matter because the file has been dormant for eighteen months thus relegating the collections client to the status of former client. Rule 1.9 of the Rules of Professional Conduct permits you to represent a current client in a matter adverse to the former client so long as the matters are not substantially related and so long as you do not use information obtained in the representation of the former client to the disadvantage of the former client.

DISCUSSION:

"The borderline between former-client conflicts and simultaneous-representation conflicts is critical because of the much stricter rule in simultaneous-representation cases that litigation is generally and absolutely prohibited against a present client, regardless of relationship between the two matters." Wolfram, Modern Legal Ethics, 358 (1986). See Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384, 1386 (2d Cir. 1976).

The question then is without some affirmative action on the part of the lawyer or law firm terminating the representation, does the collections client retain the status of "current client" as long as the judgment remains uncollected? We think not. While it would be neater practice for the firm, at some point, to return the judgment to the client and indicate that the matter is closed, such a procedure is not the only way that the collections client becomes a former client. It is our view that a current client may become a former client if the subject matter of the representation is dormant and there is a reasonable likelihood that it will remain so.

In the factual situation presented by your question, the judgments were recorded in 1988 and 1989 and you had had no contact with the client for the last eighteen months. You have also indicated that the judgments are not likely to ever be recovered. This is not unlike the situation in Abbott Laboratories v. Centaur Chemical Company, 497 F. Supp. 269 (1980). In that case, Abbott retained a lawyer to, along with in-house counsel, prosecute a patent interference matter. The lawyer filed a number of documents and presented oral argument on behalf of Abbott at the final hearing before the U.S. Patent Office Board of Patent Interference. The lawyer took no further action in the matter and, after eleven months, was retained by Centaur in an action brought by Abbott. The court held that the lawyer's representation of plaintiff in an earlier unrelated matter did not preclude the firm from representing the defendant where there was little more than a possibility that the lawyer would continue to represent the plaintiff in the unrelated matter and nearly eleven months had passed since the lawyer had been asked to act on behalf of the plaintiff.

Adopting the logic in Abbott it is our view that you may represent the personal injury client against the collections client because the matter has been dormant for eighteen months with little likelihood that it would be revived.

RWN/vf

8/3/92