RI-87
May 22, 1991
SYLLABUS
A lawyer may represent remainder will beneficiaries in an action to determine whether a contingent life estate devised to the testator's spouse has terminated even though the lawyer represented the spouse as fiduciary personal representative in settling the estate.
References: MRPC 1.9 and 3.7; R-10, RI-46; T.C. Theater Corp. v. Warner Brothers Pictures Inc, 113 F Supp 265 (SD NY 1953); Gillett v. Gillett, 269 Mich 364 (1934); In the Matter of the Estate of Elwen, 144 Mich App 423, 375 NW2d 738 (1985). CI-1181 is superseded to the extent inconsistent with this opinion.
TEXT
A lawyer drafts a will in which the testator's spouse is designated as personal representative. The will gives the spouse a conditional "life estate" in the testator's residence. One of the conditions precedent to the continued existence of the life estate is that the spouse occupy and maintain the residence. If the conditions are not met, the residence will go to other will beneficiaries. After testator's death, the spouse engages the lawyer to represent the spouse as personal representative in the administration of the will and estate. The estate is administered and testator's residence is assigned to the spouse as a conditional life estate in accordance with the terms of the will with the remainder interest to other will beneficiaries.
Several years have passed and the remainder will beneficiaries desire to engage the lawyer to file a declaratory suit to terminate the spouse's conditional life estate as the spouse has not occupied the residence due to senility and institutionalization. The lawyer has never represented the spouse in any capacity other than that of personal representative. The guardian of the spouse is opposed to the lawyer representing the other will beneficiaries because of the lawyer's earlier representation of the personal representative. The will contains no apparent ambiguities.
The courts have developed rules which prohibit a lawyer from representing a new client in a matter adverse to a former client where to do so would result in a breach of loyalty or confidence to the former client. This rule is articulated in T.C. Theater Corp. v. Warner Brothers Pictures Inc, 113 F Supp 265 (SD NY 1953), where the court held at pages 268-269:
"The former client need show no more than the matters embraced within the pending suit wherein his former attorney appears on behalf of his adversary are substantially related to the matters or cause of action wherein the attorney previously represented him, the former client. The Court will assume that during the course of the former representation confidences were disclosed to the attorney bearing on the subject matter of the representation. It will not inquire into their nature and extent. Only in this manner can the lawyer's duty of absolute fidelity be enforced and the spirit of the rule relating to privileged communications be maintained."
This judicial test now appears to be codified in MRPC 1.9(a) and is applicable to these facts and states:
"A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after consultation."
This Rule poses two questions: (1) whether the interest of the prospective client is adverse to the former client; and (2) whether the matters are the same or substantially related matters.
Clearly, the interests of the widow and remainder beneficiaries are adverse, since the remainder beneficiaries seek a judgment terminating the widow's rights in the residence. On the other hand, the interest of the remaindermen as beneficiaries and the widow as personal representative are not adverse. The personal representative had the duty to administer and settle the estate, the will contained no apparent ambiguities, and an order assigning the residue was entered transferring to the widow and the remainder beneficiaries their respective interests in the residence. In R-10 we concluded that a lawyer representing a personal representative in an estate represents that person in a fiduciary versus individual capacity.
Since the widow claimant and the widow fiduciary are the same person, it is prudent to continue this analysis. The question of whether the matters are substantially related, for the most part, concerns itself with confidential communications. RI-46 addressed the question of whether matters are substantially related in a fact situation of a lawyer wanting to represent the wife in a divorce action where the lawyer had formerly represented the husband in land contract foreclosure matters. The Committee concluded:
"If there is a likelihood that information obtained in the former representation will have relevance to the subsequent representation, the matters are substantially related."
The matter of filing an action to determine whether the conditional life estate has terminated is unrelated to the administration and settlement of the estate. Confidences gained by the lawyer in settling the estate would have no relevance to the issues to be decided in the action to determine whether the conditional life estate has terminated.
If the court is required to interpret the terms of the will which the lawyer drafted, may the lawyer continue the representation of the remainder beneficiaries? CI-1181 concluded that if the will was clear and unambiguous, it would most likely not be necessary to call the lawyer as a witness for the reason that where there is no ambiguity, the testator's intention is to be determined from the four corners of the document. However, even where the will is clear and unambiguous on its face, there may be a need (1) to prove the existence of a latent ambiguity, or (2) to indicate the actual intention of the parties, or (3) to indicate the actual intention of the parties as an aid in construction. In the Matter of the Estate of Elwen, 144 Mich App 423; 375 NW2d 738 (1985). MRPC 3.7 states:
"(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness except where:
"(1) the testimony relates to an uncontested issue;
"(2) the testimony relates to the nature and value of legal services rendered in the case; or
"(3) disqualification of the lawyer would work substantial hardship on the client.
"(b) A lawyer may act as advocate in a trial in which another lawyer in the lawyer's firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9."
Thus, another member of the lawyer's firm is not disqualified from the representation under these facts, and CI-1181 is superseded to the extent inconsistent with MRPC 3.7(b).
Although the interests of the prospective client are adverse to the interests of the former client, the matters are not substantially related matters and a member of the lawyer's firm may represent the new client although the lawyer may not do so where it is likely the lawyer will be called as a witness.