If a bank's collection lawyer later does unrelated deed work for the very person the bank once asked him to collect from, can he take a new collection case against that person for the bank?

Plain-English summary

A bank, a regular client for whom an attorney did substantial collection work, asked the attorney to write to an individual about a past-due account. The attorney sent a certified demand letter, but before it arrived the individual settled the account with the bank, the attorney was told to take no further steps, the letter came back unclaimed, and the file was closed. About two months later, that same individual (Client A) asked the attorney to draft deeds transferring property from his father to him. The attorney disclosed his collection work for the bank and the earlier letter; Client A said that was all right and asked him to proceed. The deeds were prepared, and later revised at Client A's and his son's request. Months after the last contact, the bank asked the attorney to begin a new collection proceeding against Client A, and the attorney asked whether he could take it.

The Commission first addressed the deed work. When Client A first came in, the attorney properly complied with Rule 3.4(a) by disclosing his bank relationship and his role in the earlier collection effort, and properly considered Rule 3.4(b). Because the overdue account was unrelated to the father-to-son deed transfers, the prior collection matter had ended when Client A settled, and the deed work would not adversely affect the bank's ability to collect, the attorney reasonably concluded the deed representation would not impair his independent judgment for either the bank or Client A; the bank's consent to the deed work was therefore unnecessary.

On the new collection request, the Commission concluded that an attorney-client relationship continued to exist between the attorney and Client A, despite three months of silence, because the parties' conduct (including an earlier, similar hiatus) showed they treated the relationship as ongoing. The attorney therefore had to treat the new collection suit as a suit against a present client. Before accepting it, he had to disclose his relationship with Client A to the bank (Rule 3.4(a)); the suit would involve representing "differing interests," forbidden under Rule 3.4(b) unless it was obvious he could adequately represent both the bank and Client A and each consented after full disclosure (Rule 3.4(d)). The Commission saw no facts suggesting he could not adequately represent the bank if Client A consented, since the deeds were already complete. Finally, the attorney had to consider Rule 3.4(f): if, for example, he was trying to collect his own fee from Client A, that interest could affect how he proceeded for the bank, requiring the bank's informed written consent.

Currency note

This opinion was issued in 1982, before Maine's replacement of the former Maine Bar Rules with the Maine Rules of Professional Conduct (effective August 1, 2009). 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: Was the debtor a former client or a current client when the bank asked for the new suit?

A: The opinion concluded he was a present client. The earlier deed work created an attorney-client relationship the parties treated as ongoing, despite the months of silence, so the new collection suit was a suit against a current client.

Q: Could the lawyer take the new collection case at all?

A: The opinion concluded he could, but only with disclosure to the bank (Rule 3.4(a)) and the informed consent of both the bank and Client A (Rules 3.4(b), 3.4(d)), and only if it was obvious he could adequately represent both.

Q: Why did the lawyer also have to consider his own interest?

A: The opinion pointed to Rule 3.4(f): if the lawyer was trying to collect his own fee from Client A, that interest could affect how he handled the bank's collection matter, so the bank's informed written consent would be required.

Q: Did the earlier deed work require the bank's consent?

A: The opinion concluded no. The deed transfers were unrelated to the closed collection matter and would not affect the bank's ability to collect, so the lawyer was not representing differing interests and the bank's consent was unnecessary.

Background and rules framework

The opinion interprets Maine Bar Rule 3.4(a) (disclosure of relationships before accepting employment), Rule 3.4(b) (employment likely to impair independent judgment or involving differing interests), Rule 3.4(d) (multiple representation permitted only when it is obvious the lawyer can adequately represent all parties and each consents), and Rule 3.4(f) (a lawyer's own interest affecting professional judgment). These correspond to Model Rule 1.7 (concurrent conflicts of interest) and Model Rule 1.9 (duties to former clients). The pivotal question is when the attorney-client relationship ends, which determined whether the new suit was against a present or former client.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.7 (concurrent conflicts); Model Rule 1.9 (former clients)
• Maine Bar Rules 3.4(a), 3.4(b), 3.4(d), 3.4(f)

See also

• Maine Ethics Op. 37: Representing a Retailer and Its Customers
• Maine Ethics Op. 44: Injured Claimant and Subrogated Insurer
• Maine Ethics Op. 47: Personal Representative and Beneficiaries

Source

• Landing page: https://mebaroverseers.org/attorney_services/opinion.html?id=89645

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Issued by the Professional Ethics Commission

Date Issued: September 22, 1982

Facts

The Commission has been asked for an advisory opinion in regard to the following situation. An attorney was requested by a local Bank to write to an individual about a past due account. At that time, the local Bank was, and has continued to be, a regular client of the attorney's firm and a client for whom the attorney does a considerable amount of collection work. The attorney sent the individual a letter by certified mail indicating the Bank's intention to institute legal proceedings in the event his account was not brought current. Before receiving the letter, the individual went to the Bank and made arrangements satisfactory to the Bank for bringing his account current. The attorney was instructed by the Bank to take no further steps in the collection matter. Subsequently, the letter was returned to the attorney "unclaimed." The attorney was paid by the Bank for writing to the individual and the file was closed.

Approximately two months later, the individual to whom the attorney had written came to the attorney's office and asked him to draft some deeds for him. The deeds involved property owned by the individual's father which the father intended to transfer to the individual. The lawyer advised the individual that he did collection work for the local Bank and had sent the individual a letter a few months before regarding his overdue account. The lawyer indicated to the individual that the file had been closed since arrangements had been made to bring the account current. The individual said that was all right and asked the attorney to draft the deeds. The deeds were prepared and the individual (hereinafter Client A) was notified that he could pick up the deeds at his convenience. After not hearing from Client A for a few months, the attorney wrote again and received no response.

Several months later, Client A and his son came to the attorney's office and requested that some of the deeds be revised, replacing the son as the grantee, and that the son be billed for the revised deeds. The revisions were made and Client A and the son were so advised. Three months have passed since the attorney has heard from either Client A or his son.

The attorney now has received a request from the Bank to begin collection proceedings against this individual, Client A. The Attorney has requested an advisory opinion as to whether he can handle this collection matter on behalf of the Bank.

Opinion

At the time when Client A came to the attorney to request the attorney to draft some deeds, the attorney was required to and did properly comply with Rule 3.4(a) by disclosing to the prospective client his relationship with the Bank and his involvement in the initial stages of the former collection proceeding against the individual. Also at that time, the attorney was obligated to consider Rule 3.4(b) which forbids an attorney from accepting employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be affected. The facts in this case indicate that there was no relationship between Client A's formerly overdue account and the deeds which were to transfer property from Client A's father to Client A. Furthermore, the previous collection proceeding had been terminated when Client A made satisfactory arrangements with the Bank regarding this account and the file was closed. Therefore, it was appropriate for the attorney to have concluded that his representation of Client A in a matter totally unrelated to the former collection proceeding would not affect the exercise of his independent professional judgment on behalf of either the Bank or Client A. In addition, the attorney's work for Client A, which involved the transfer of property into Client A's estate, would have had no adverse effect on the Bank's ability to collect on Client A's account. Therefore, since the attorney was unlikely to be involved in representing differing interests, the Bank's consent to the attorney's work for Client A was not necessary.

At the time that the Bank requested that the attorney begin the second collection action against Client A, it is the Commission's opinion that an attorney-client relationship continued to exist between the attorney and Client A despite the fact that three months had elapsed since the attorney had heard from Client A. The facts in this case indicate that previously there had been a substantial hiatus between the time the attorney had drafted deeds for Client A and the time Client A had contacted the attorney regarding these deeds. Nonetheless, the actions of both Client A and the attorney indicate that they considered the attorney-client relationship ongoing at that time. Under these circumstances, the attorney must consider the acceptance of the collection suit from the Bank against Client A as a suit against a present client.

Before accepting employment on behalf of the Bank against Client A, the attorney is required to disclose to the Bank his relationship with Client A. Rule 3.4(a). In addition, this second collection action would involve the attorney in representing "differing interests" which is forbidden under Rule 3.4(b) unless it is obvious that the attorney can adequately represent the interests of both the Bank and Client A and each consents to the representation after full disclosure. Rule 3.4(d). Accordingly, the attorney must fully disclose to both the Bank and Client A the possible effect of his representation on the exercise of his independent professional judgment and obtain the consent of both. In the event both such consents can be obtained, the question still remains whether "it is obvious" that the attorney can adequately represent both interests. Client A's interest in the preparation of the deeds appears to be adequately protected since the attorney had completed the deeds for Client A before the Bank asked him to institute the second collection proceeding. There are no facts before the Commission which would lead it to conclude that the attorney could not adequately represent the Bank in the collection proceeding if Client A consented to such representation.

The attorney also must consider Rule 3.4(f) which forbids a lawyer from accepting employment if the exercise of his professional judgment on behalf of a client may be affected by any interest of the lawyer. Although there are no facts presented in this case which suggest a problem with this rule, the possibility that one may exist should be considered by the attorney. For example, the fact that the attorney may be attempting to collect his fee from Client A could affect the way in which he would proceed on behalf of the Bank in the collection matter. If such were the case, informed written consent of the Bank would be required in accordance with Rule 3.4(f).