Can a lawyer who once represented a client buying a property later foreclose the mortgage on it for a lender against that former client?

Plain-English summary

The inquiry presented a recurring problem: an attorney suing a client he had previously represented. The attorney had been retained by a lending institution to foreclose a mortgage against a former client whom he had represented in purchasing the property in question; he had never previously represented the client and had no subsequent relationship with him. He cited Opinion 94 but thought it did not apply.

The Committee disagreed. Opinion 94 had held it improper to foreclose against a former client, reasoning that doing so tends to impair the confidence a client has a right to repose in his attorney and thus to destroy an essential of the professional relationship. The attorney relied on Hansen v. Janitschek, but the Committee explained that, in reversing the Appellate Division, the Supreme Court adopted Judge Conford's dissent, which turned on the finding that no attorney-client relationship had ever existed between the plaintiff and the lawyer there. Here, by contrast, the inquirer himself described the proposed defendant as "a former client of mine" and repeatedly referred to the mortgagor as a "client," so an attorney-client relationship plainly existed.

Citing federal decisions on disqualification to sue former clients (Akerly v. Red Barn System and Fund of Funds v. Arthur Andersen & Co.), and noting the courts' caution that such ethical lines are fine, the Committee concluded it would be clearly improper for the attorney to represent the lending institution in the foreclosure against his former client.

Currency note

This opinion was issued in 1978, before New Jersey's 1984 replacement of the Disciplinary Rules by the Rules of Professional Conduct and the later revisions to those rules. In current New Jersey terms the analysis corresponds to RPC 1.9 (duties to former clients) and RPC 1.7. Treat this page as historical context, not current guidance.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: Can a lawyer foreclose for a lender against a person he once represented?

A: No. The opinion held it clearly improper, because suing a former client tends to impair the confidence essential to the attorney-client relationship.

Q: Did it matter that the prior representation was a single transaction?

A: The opinion did not treat a single representation as a safe harbor; what mattered was that an attorney-client relationship had existed, which the inquirer himself acknowledged by calling the defendant a "former client."

Q: Why didn't Hansen v. Janitschek help the attorney?

A: Because the Supreme Court there adopted a dissent finding that no attorney-client relationship had ever existed, unlike this inquiry where the relationship plainly existed.

Background and rules framework

The opinion applied the former-client confidence principle of Opinion 94, distinguished Hansen v. Janitschek on the absence of an attorney-client relationship there, and drew on federal disqualification decisions. In current New Jersey terms the analysis corresponds to RPC 1.9 and RPC 1.7.

Citations and references

Rules of Professional Conduct:

• MR 1.9 / NJ RPC 1.9 (duties to former clients)
• MR 1.7 / NJ RPC 1.7 (conflicts of interest)

Cases:

• Hansen v. Janitschek, 57 N.J. Super. 418 (App. Div. 1959), rev'd 31 N.J. 545 (1960)
• Akerly v. Red Barn System, Inc., 551 F.2d 539, 544 (3d Cir. 1977)
• Fund of Funds v. Arthur Andersen & Co. (2d Cir. 1977)

Other opinions cited:

• NJ ACPE Opinion 94, 89 N.J.L.J. 333 (1966)

See also

• NJ ACPE Op. 412: Defending a Municipality Against Its Former Mayor
• NJ ACPE Op. 504: Former Municipal Workers' Comp Defense Counsel Suing the Municipality
• NJ ACPE Op. 507: Suing a Current Client in an Unrelated Action

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp391-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Reproduced from a full-text mirror of the official opinion for research purposes. The linked official source controls.

101 N.J.L.J. 209, March 9, 1978

OPINION 391

Conflict of Interest - Foreclosure Against Former Client

The problem posed by this inquiry is one with which we have dealt heretofore, i.e., an attorney suing a client whom he has previously represented. The attorney says that he has been retained by a lending institution to foreclose a mortgage "against a former client of mine." He states that he represented the client in purchasing the property in question while he was a review attorney for the lending institution. He had never previously represented the client nor has he had any subsequent relationship with him. The attorney is now asked by the lending institution to foreclose the mortgage. The inquirer cites this Committee's Opinion 94, 89 N.J.L.J. 333 (1966), but thinks it does not apply here. There, we said that it would be improper for the attorney to foreclose a mortgage against a former client. In that case, there had been representation by the attorney of the client on several occasions. There we discussed at length, citing other opinions, that to foreclose against a former client under such circumstances would tend to impair the confidence which a client has a right to repose in his attorney and would thus tend to destroy one of the essentials of the professional relationship.

The inquirer relies upon the case of Hansen v. Janitschek, 57 N.J. Super. 418 (App. Div. 1959), reversed 31 N.J. 545 (1960). In reversing, the Supreme Court adopted the dissenting opinion of Judge Conford in the Appellate Division. We cited and considered Janitschek in Opinion 94, supra. However, a careful reading of Judge Conford's opinion reveals that he came to the conclusion that no attorney-client relationship existed between the plaintiff and the lawyer involved and he said, at page 431: "It does not appear that he had ever previously represented or acted as legal advisor to Mr. or Mrs. Hansen in any capacity whatever." He repeated, at page 433, that there was no basis for inference in the proofs that the plaintiff and the attorney contemplated any rendition by the latter of legal services to the former. Here the inquirer states specifically that the proposed defendant was "a former client of mine" and in several places in the inquiry he refers to the mortgagor as a "client." Obviously, he considered that an attorney-client relationship existed.

For recent decisions discussing the disqualification of attorneys to sue former clients, see Akerly v. Red Barn System, Inc., 551 F.2d 539, 544 (3 Cir. 1977), and Fund of Funds v. Arthur Andersen & Co., F.2d (2 Cir. 1977). Cf., 64 Yale L.J. 917, 928 (1955), "Disqualification of Attorneys for Representing Interests Adverse to Former Clients." In the Fund of Funds case, the court prefaced its opinion with the statement, "[w]hen dealing with ethical principles . . . we cannot paint with broad strokes. The lines are fine and must be so marked [citing several cases]."

Under the circumstances, it would be clearly improper for the attorney to represent the lending institution in the foreclosure action against his former client.