Can a lawyer who defended one insured and settled a claim against him later represent the same insurer in defending the other insured's UM/UIM claim arising from the same accident?
Texas Ethics Opinion 659: Representing an Insured, Then the Insurer, on the Same Incident
Short answer: Per the Committee, a lawyer who defended one insured and settled a claim against him may later represent that insurer in defending another insured's UM/UIM claim arising from the same accident, because the two clients' interests are not adverse to each other; neither Rule 1.06 nor Rule 1.09 is implicated.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the Texas Disciplinary Rules of Professional Conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. The opinion text is reproduced at the bottom; the official source (linked) controls.
Plain-English summary
The opinion involves an auto accident between A and B, both insured by the same company. A's insurer-provided lawyer litigated and settled B's suit against A for A's $30,000 policy limit. B then sought additional recovery under her own UM/UIM coverage, the insurer denied it, and in B's suit against the insurer the same lawyer who represented A now represents the insurer, whose position is that the $30,000 B already collected covered all her damages.
The Committee analyzes the situation under Rule 1.06 (general conflicts) and Rule 1.09 (former-client conflicts). Rule 1.06(b)(1) bars representing a person in a substantially related matter where that person's interests are materially and directly adverse to another client of the lawyer or firm, and Rule 1.09 bars certain representations adverse to a former client. The opinion agrees the lawyer's representation of the insurer in B's UM/UIM suit is substantially related to the earlier representation of A.
But the opinion finds the key element missing: there is no adversity between the insurer's present interest and A's earlier interest. Both clients' interests are adverse to B, not to each other. Because the substantial-relationship test alone does not create a conflict without adversity between the lawyer's clients, neither Rule 1.06 nor Rule 1.09 is implicated, and the lawyer may take the insurer's defense.
In practice
Under this opinion, and under the Texas rules as they stood at the time of the opinion, a lawyer who represented one insured in settling a claim may represent that client's insurer in defending another insured's claim arising from the same incident. The opinion holds that the controlling question under Rules 1.06 and 1.09 is whether the lawyer's two clients are adverse to each other; where both are adverse only to the claimant and not to one another, the matters being substantially related does not bar the second representation.
Common questions
Q: I defended an insured and settled the case. Can I now defend that same insurer against a different insured's claim from the same wreck?
A: Per Opinion 659, yes; the Committee finds no adversity between your two clients (the first insured and the insurer), so neither Rule 1.06 nor Rule 1.09 bars the representation.
Q: Doesn't the fact that the two matters are substantially related create a conflict?
A: No, not by itself. The opinion explains that a substantial relationship matters under Rules 1.06 and 1.09 only when the clients' interests are adverse to each other; here both are adverse to the claimant, not to one another.
Background and rules framework
The opinion interprets Texas Disciplinary Rule 1.06(b)(1) (representation involving a substantially related matter with materially and directly adverse interests of another client), which corresponds to ABA Model Rule 1.7, and Rule 1.09 (former-client conflicts), which corresponds to ABA Model Rule 1.9.
Citations and references
Rules of Professional Conduct:
- MR 1.7 (conflicts of interest; current clients)
- MR 1.9 (duties to former clients)
- Texas Disciplinary Rules 1.06(b)(1), 1.09
See also
- ABA Formal Op. 05-435: A Lawyer Acting Against an Insured of a Client Insurer
- California Op. 1995-139: Insurer-Retained Counsel's Duty of Loyalty to the Insured
- TX Ethics Op. 645: Debtor Counsel Versus a Creditor Who Is a Current or Former Client
Source
- Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-659/
- Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_659.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
QUESTION PRESENTED
May a Texas lawyer represent one insured in settling a claim and later represent that client's insurance company in defending another insured's claim that arises out of the same incident?
STATEMENT OF FACTS
A and B are involved in an automobile accident. Each has a policy issued by the same insurance company. A's liability policy has a coverage limit of $30,000. B has both liability coverage and uninsured/under-insured (UM/UIM) coverage.
B sued A. A's lawyer, provided by the insurance company, litigated the case and eventually settled B's claim against A for the full $30,000 limit of A's policy.
B also sought additional recovery under her own policy's UM/UIM coverage, which the insurance company denied. In B's lawsuit against the insurance company, the lawyer who represented A now represents the insurance company. The insurance company's position in B's lawsuit is that the $30,000 that B collected under A's policy was sufficient to cover all of B's damages in the accident.
DISCUSSION
Rule 1.06 of the Texas Disciplinary Rules of Professional Conduct is the general rule regarding conflicts of interest. Subject to exceptions not relevant here, Rule 1.06(b)(1) precludes a lawyer from representing a person if the representation of that person "involves a substantially related matter in which that person's interests are materially and directly adverse to the interests of another client of the lawyer or the lawyer's firm[.]" In similar fashion, Rule 1.09 precludes a lawyer from representing another person in a matter adverse to a former client in certain situations as set out in the Rule.
Here, the lawyer's representation of the insurance company in defending B's suit regarding UM/UIM coverage is substantially related to the lawyer's representation of A in defending and settling B's suit against A regarding the accident. There is no adversity, however, between the insurance company's present interest and A's earlier interest. In these circumstances, both clients' interests are adverse to B, but not to each other. Thus, neither Rule 1.06 nor Rule 1.09 is implicated by the lawyer's defending the insurance company in B's lawsuit.
CONCLUSION
Under the Texas Disciplinary Rules of Professional Conduct, a lawyer may represent one insured client in settling a claim against that client and represent the client's insurance company in defending another insured's claim against the insurance company that arises out of the same incident because, in that circumstance, there is no conflict between the lawyer's two clients as their interests are not adverse.
Tex. Comm. On Professional Ethics, Op. 659 (2016)