The “Mere Possibility” Of An Attorney Conflict Of Interest May Be Sufficient To Establish An Ethical Breach

New Jersey estate planning attorneys were again reminded of the conflict of interest minefield they face in In Re Buscavage, N.J. App. Div. No. A-6041-08AT3 (Aug. 25, 2010).

Buscavage involved a challenge to trust amendments made by the decedent, Joseph Buscavage, in the final year of his life, which favored certain members of his family, including defendant Helen Goodrich. His prior estate documents had been prepared by two different attorneys and amended through 2003; the estate documents being challenged were prepared in 2007 by a new attorney, Martin A. Gleason, Esq. Slip op. at 3-4.

Mr. Gleason was first contacted by Helen Goodrich regarding amending Joseph’s trust. The three later met at Mr. Gleason’s office, at which time Joseph produced a handwritten paper with the desired trust changes. Mr. Gleason testified at trial that Joseph seemed “absolutely fine” and that Ms. Goodrich did not speak during the meeting. Mr. Gleason drafted the trust amendment and brought it to the hospital where Joseph was scheduled for respiratory surgery, and Mr. Gleason witnessed Joseph’s signature. Ms. Goodrich was present at the execution. Slip op. at 5-6.

About five months later, Joseph made a second trust amendment. According to Mr. Gleason, Joseph told him the desired changes by telephone; Mr. Gleason drafted the amendment, went to Joseph’s home, and met with Joseph in the presence of Ms. Goodrich. Mr. Gleason testified that Joseph had declined physically, but was fine mentally. Joseph died 2 ½ months later.

Notably, Mr. Gleason had previously represented Ms. Goodrich in her capacity as co-executor in the sale of a home, and represented Ms. Goodrich’s daughter in the purchase and sale of her home. Slip op. at 7. The plaintiffs alleged that this prior relationship was a conflict of interest and impaired Mr. Gleason’s ability to independently represent Joseph.

After a five-day trial in the undue influence case, the lower court found that the decedent’s will had not been overcome by undue influence, and that the drafting attorney’s former representation of family members did not create a conflict of interest that compromised the testamentary amendments at issue. Slip op. at 10-11.

Upon review, the appellate court considered, among other things, the role of the attorney in an undue influence case. The court found that “a conflict on the part of an attorney in a testimonial situation is fraught with a high potential for undue influence, generating a strong presumption that there was such improper influence and warranting a greater quantum of proof to dispel the presumption.” Slip op. at 14 (quoting Haynes, 87 N.J. 163, 176 (1981)).

The Appellate Division found that the trial court’s written opinion was deficient, and remanded the case for further proceedings. As to the role of the attorney, the appellate court found that the trial court had failed to properly address and analyze the evidence regarding Mr. Gleason’s role in the case. Although the defendants argued on appeal that the facts did not trigger the conflict of interest concerns articulated in Haynes, the appellate court was unconvinced:

Attorneys engaged to perform this highly personal and sensitive task for a client are held to an extremely high standard of professional conduct. In this context, “a conflict of interest … need not be obvious or actual to create an ethical impropriety. The mere possibility of such a conflict at the outset of the relationship is sufficient to establish an ethical breach on the part of the attorney” … we are unable to ascertain whether the court determined if Gleason’s conduct presented the possibility of a conflict. We are thus compelled to remand this case for further analysis.

Slip op. at 15 (quoting Haynes).

A copy of the decision can be found here – In Re Buscavage.

Assuming that attorney Gleason is found on remand to have violated the governing N.J. ethical rules, has he also committed legal malpractice? In New Jersey, a violation of the Rules of Professional Conduct is not only a basis for the imposition of attorney discipline, it is also evidence of legal malpractice. Baxt v. Liloia, 155 N.J. 190, 199-201 (1998) However, even when it is established that an attorney violated the rules of professional ethics, both proximate causation and actual damages must be shown in order to prevail in a legal malpractice action. Conklin v. Hannoch Weisman, 145 N.J. 395, 416 (1996) Therefore, the answer to the question is: Maybe. Attorney Gleason may have committed legal malpractice by violating N.J.’s ethical rules, but in addition to the ethical violation it must be shown that (1) the attorney’s actions were the proximate cause of the claimant’s injury, and (2) actual damages resulted from the wrongful act.