(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Submitted April 1, 1999 -- Decided April 15, 1999
POLLOCK, J., writing for a unanimous Court.
This interlocutory appeal addresses in a situation of joint representation the issue of a law firm's
disclosure of confidential information of one co-client to another co-client, a subject that involves a conflict
between an attorney's ethical duty to maintain client confidences and the obligation to inform a client of
material facts. In this case, the specific question is whether the law firm that drew wills for a husband and
wife should be permitted to reveal to the wife that the husband has an illegitimate child, a fact learned by the
firm after the wills were executed.
The husband and wife retained Hill Wallack (the firm), a law firm of approximately sixty attorneys,
in October 1997 for estate-planning purposes, and because the firm was to represent both spouses, signed
letters captioned “Waiver of Conflict of Interest.” The letters explained that information provided by one
spouse could become available to the other and recited that a testamentary transfer of property by one
spouse to the other would permit the spouse receiving the property to dispose of it as that spouse desired.
Each spouse consented to and waived any conflicts arising from the firm's joint representation.
The husband and wife later executed wills drawn by the firm's estate-planning department, under
which they agree to leave their respective residuary estates to each other. If the other spouse does not
survive, the contingent beneficiaries are the testator's issue, which by statute includes legitimate and
illegitimate children.
In January 1998, before the wills were signed, the firm was retained to represent a woman (the
mother) to pursue a paternity claim against the husband. Although the firm conducted a computer search of
its files to detect any possible conflict of interest before agreeing to represent the mother, the search did not
reveal the husband as an existing client because the surname had been misspelled due to a clerical error
when the estate-planning files of the husband and wife were opened.
When the husband was contacted by the attorney from Hill Wallack's family law department on
behalf of the mother, he did not reveal that he, too, was a client of the firm and did not object to the firm's
representation of the mother. He had retained another firm to represent him in connection with the paternity
claim, which he initially disputed. DNA testing revealed the husband to be the father of the mother's child
and suit was instituted against the husband when negotiations over child support broke down. The firm
learned of its conflict of interest when the husband's attorney in the paternity action told the firm's family
law attorney representing the mother that the firm's estate-planning department had done legal work for the
husband.
The firm immediately withdrew from representing the mother in the paternity suit. The firm wrote
to the husband to state that because of the wife's estate plan, it believed it had an ethical obligation to
disclose to the wife the existence, but not the identity, of the husband's illegitimate child, and said it would
make this disclosure unless the husband did so himself by a date certain. The husband joined the firm as a
third-party defendant in the paternity action to prevent the firm from making the disclosure. The Family Part
denied the husband's requested restraints, but the Appellate Division reversed and remanded “for the entry
of an order imposing preliminary restraints and for further consideration.” The firm moved for leave to
appeal that order and this Court granted leave to appeal and decided the appeal summarily ( R. 2:8-3(a) ),
without oral argument.
HELD: The husband's deliberate failure to reveal the existence of his illegitimate child during a law firm's
joint estate planning for husband and wife constituted a fraud on his wife, and the attorneys whose services,
in effect, were used in furtherance of the fraudulent act are authorized to disclose to the wife the existence
of the child.
1. Under New Jersey's Rules of Professional Conduct ( RPCs) for attorneys, a lawyer is required to “explain
a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the
representation.” RPC 1.4(b). And although an attorney is ethically bound by RPC 1.6 (a) not to disclose a
client's confidential communications, RPC 1.6 ( c ) (1) permits an attorney to disclose confidential
information to the extent the lawyer reasonably believes necessary “to rectify the consequences of a client's
criminal, illegal, or fraudulent act in furtherance of which the lawyer's services have been used.” The
husband's deliberate omission of the existence of his illegitimate child during estate planning constitutes a
fraud on the wife in the preparation of her estate and he has in effect used the firm's services to defraud
her. (pp. 7-11)
2. The firm did not learn of the existence of the illegitimate child from the husband, who concealed the fact
from his wife and his estate-planning attorney, so the husband's expectation of non-disclosure may be less
than if he had revealed the information in confidence. Also, the spirit of the conflict-waiver letters signed by
the husband and wife, which contained an acknowledgment that confidential information of one co-client
might become available to the other, supports the firm's decision to reveal the information to the wife.
(pp.11-14)
3. Persuasive secondary authority is in accord. An attorney who represents clients jointly should have with the
clients at the outset an explicit agreement about the sharing of confidential information. In the absence of
such an agreement, the Restatement (Third) of The Law Governing Lawyers leaves to the attorney's
discretion the resolution of the lawyer's competing ethical obligations. The Restatement suggests that in
estate planning, disclosure of one client's confidential information to the co-client is appropriate only if the
failure of the co-client to have the spouse's information would be materially detrimental to the co-client or
frustrate that party's intended testamentary arrangement. (pp. 14-21 )
4. Unlike the Restatement and other authorities favoring a discretionary rule, the Professional Ethics
Committees of Florida and New York have concluded that disclosure to a co-client is prohibited. Neither
state, however, has a rule like New Jersey's RPC 1.6 (c) (1) that permits disclosure to rectify the
consequences of a fraud. (pp. 21-23)
5. Permitting the firm to disclose to the wife the existence, but not the identity, of the husband's child does
not violate N.J.S.A. 9:17-42, the confidentiality provision of the New Jersey Parentage Act. (p.24 )
The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the
Family Part.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, GARIBALDI, STEIN, and COLEMAN join
in JUSTICE POLLOCK's opinion. JUSTICE O'HERN did not participate.
SUPREME COURT OF NEW JERSEY
A-
86 September Term 1998
A., individually and on behalf of
minor child, C.,
Plaintiff,
v.
B.,
Defendant and Third-Party
Plaintiff-Respondent,
v.
HILL WALLACK, Attorneys at Law,
Third-Party
Defendant-Appellant.
Submitted April 1, 1999 -- Decided April 15,
1999
On appeal from Appellate Division,
Superior Court.
John J. Gibbons submitted a brief on behalf
of appellant (Gibbons, Del Deo, Dolan,
Griffinger & Vecchione, attorneys).
Mark Z. Segal and Neil M. Day submitted a
brief on behalf of respondent (Fox,
Rothschild, O'Brien & Frankel, attorneys;
Kenneth H. Mack, of counsel).
The opinion of the Court was delivered by
POLLOCK, J.
This appeal presents the issue whether a law firm may
disclose confidential information of one co-client to another co-client. Specifically, in this paternity action, the mother's
former law firm, which contemporaneously represented the father
and his wife in planning their estates, seeks to disclose the
existence of the father's illegitimate child to the wife.
A law firm, Hill Wallack, (described variously as "the law
firm" or "the firm") jointly represented the husband and wife in
drafting wills in which they devised their respective estates to
each other. The devises created the possibility that the other
spouse's issue, whether legitimate or illegitimate, ultimately
would acquire the decedent's property.
Unbeknown to Hill Wallack and the wife, the husband recently
had fathered an illegitimate child. Before the execution of the
wills, the child's mother retained Hill Wallack to institute this
paternity action against the husband. Because of a clerical
error, the firm's computer check did not reveal the conflict of
interest inherent in its representation of the mother against the
husband. On learning of the conflict, the firm withdrew from
representation of the mother in the paternity action. Now, the
firm wishes to disclose to the wife the fact that the husband has
an illegitimate child. To prevent Hill Wallack from making that
disclosure, the husband joined the firm as a third-party
defendant in the paternity action.
In the Family Part, the husband, represented by new counsel,
Fox, Rothschild, O'Brien & Frankel ("Fox Rothschild"), requested
restraints against Hill Wallack to prevent the firm from
disclosing to his wife the existence of the child. The Family
Part denied the requested restraints. The Appellate Division
reversed and remanded "for the entry of an order imposing
preliminary restraints and for further consideration."
Hill Wallack then filed motions in this Court seeking leave
to appeal, to present oral argument, and to accelerate the
appeal. Pursuant to Rule 2:8-3(a)See footnote 1, we grant the motion for
leave to appeal, accelerate the appeal, and reverse the judgment
of the Appellate Division and remand the matter to the Family
Part. Hill Wallack's motion for oral argument is denied.
Although the record is both informal and attenuated, the parties agree substantially on the relevant facts. Because the Family Part has sealed the record, we refer to the parties without identifying them by their proper names. So viewed, the record supports the following factual statement.
In October 1997, the husband and wife retained Hill Wallack, a firm of approximately sixty lawyers, to assist them with planning their estates. On the commencement of the joint representation, the husband and wife each signed a letter captioned “Waiver of Conflict of Interest.” In explaining the possible conflicts of interest, the letter recited that the effect of a testamentary transfer by one spouse to the other would permit the transferee to dispose of the property as he or she desired. The firm's letter also explained that information provided by one spouse could become available to the other. Although the letter did not contain an express waiver of the confidentiality of any such information, each spouse consented to and waived any conflicts arising from the firm's joint representation.
Unfortunately, the clerk who opened the firm's estate planning file misspelled the clients' surname. The misspelled name was entered in the computer program that the firm uses to discover possible conflicts of interest. The firm then prepared reciprocal wills and related documents with the names of the husband and wife correctly spelled.
In January 1998, before the husband and wife executed the estate planning documents, the mother coincidentally retained Hill Wallack to pursue a paternity claim against the husband. This time, when making its computer search for conflicts of interest, Hill Wallack spelled the husband's name correctly. Accordingly, the computer search did not reveal the existence of the firm's joint representation of the husband and wife. As a result, the estate planning department did not know that the family law department had instituted a paternity action for the mother. Similarly, the family law department did not know that the estate planning department was preparing estate plans for the husband and wife.
A lawyer from the firm's family law department wrote to the husband about the mother's paternity claim. The husband neither objected to the firm's representation of the mother nor alerted the firm to the conflict of interest. Instead, he retained Fox Rothschild to represent him in the paternity action. After initially denying paternity, he agreed to voluntary DNA testing, which revealed that he is the father. Negotiations over child support failed, and the mother instituted the present action.
After the mother filed the paternity action, the husband and wife executed their wills at the Hill Wallack office. The parties agree that in their wills, the husband and wife leave their respective residuary estates to each other. If the other spouse does not survive, the contingent beneficiaries are the testator's issue. The wife's will leaves her residuary estate to her husband, creating the possibility that her property ultimately may pass to his issue. Under N.J.S.A. 3C:1-2, :2-48, the term "issue" includes both legitimate and illegitimate children. When the wife executed her will, therefore, she did not know that the husband's illegitimate child ultimately may inherit her property.
The conflict of interest surfaced when Fox Rothschild, in response to Hill Wallack's request for disclosure of the husband's assets, informed the firm that it already possessed the requested information. Hill Wallack promptly informed the mother that it unknowingly was representing both the husband and the wife in an unrelated matter.
Hill Wallack immediately withdrew from representing the mother in the paternity action. It also instructed the estate planning department not to disclose any information about the husband's assets to the member of the firm who had been representing the mother. The firm then wrote to the husband stating that it believed it had an ethical obligation to disclose to the wife the existence, but not the identity, of his illegitimate child. Additionally, the firm stated that it was obligated to inform the wife "that her current estate plan may devise a portion of her assets through her spouse to that child." The firm suggested that the husband so inform his wife and stated that if he did not do so, it would. Because of the restraints imposed by the Appellate Division, however, the firm has not disclosed the information to the wife.
This appeal concerns the conflict between two fundamental obligations of lawyers: the duty of confidentiality, Rules of Professional Conduct (RPC) 1.6(a), and the duty to inform clients of material facts, RPC 1.4(b). The conflict arises from a law firm's joint representation of two clients whose interests initially were compatible, but now conflict.
Crucial to the attorney-client relationship is the attorney's obligation not to reveal confidential information learned in the course of representation. Thus, RPC 1.6(a) states that “[a] lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation.” Generally, "the principle of attorney-client confidentiality imposes a sacred trust on the attorney not to disclose the client's confidential communication." State v. Land, 73 N.J. 24, 30 (1977).
A lawyer's obligation to communicate to one client all information needed to make an informed decision qualifies the firm's duty to maintain the confidentiality of a co-client's information. RPC 1.4(b), which reflects a lawyer's duty to keep clients informed, requires that “[a] lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” See also Gautam v. De Luca, 215 N.J. Super. 388, 397 (App. Div. 1987) (stating that attorney has continuing duty “to inform his client promptly of any information important to him”); Passanante v. Yormark, 138 N.J. Super. 233, 238 (App. Div. 1975) (“[An attorney's] duty includes the obligation of informing his client promptly of any known information important to him.”). In limited situations, moreover, an attorney is permitted or required to disclose confidential information. Hill Wallack argues that RPC 1.6 mandates, or at least permits, the firm to disclose to the wife the existence of the husband's illegitimate child. RPC 1.6(b) requires that a lawyer disclose “information relating to representation of a client” to the proper authorities if the lawyer “reasonably believes” that such disclosure is necessary to prevent the client “from committing a criminal, illegal or fraudulent act that the lawyer reasonably believes is likely to result in death or substantial bodily harm or substantial injury to the financial interest or property of another . . . .” RPC 1.6(b)(1). Despite Hill Wallack's claim that RPC 1.6(b) applies, the facts do not justify mandatory disclosure. The possible inheritance of the wife's estate by the husband's illegitimate child is too remote to constitute "substantial injury to the financial interest or property of another" within the meaning of RPC 1.6(b).
By comparison, in limited circumstances RPC 1.6(c) permits a lawyer to disclose a confidential communication. RPC 1.6(c) permits, but does not require, a lawyer to reveal confidential information to the extent the lawyer reasonably believes necessary “to rectify the consequences of a client's criminal, illegal or fraudulent act in furtherance of which the lawyer's services had been used.” RPC 1.6(c)(1). Although RPC 1.6(c) does not define a “fraudulent act,” the term takes on meaning from our construction of the word “fraud,” found in the analogous “crime or fraud” exception to the attorney-client privilege. N.J.R.E. 504(2)(a) (excepting from attorney-client privilege “a communication in the course of legal service sought or obtained in the aid of the commission of a crime or fraud”); see Kevin H. Michels, New Jersey Attorney Ethics § 15:3-3 at 280 (1998) (“While the RPCs no longer incorporate the attorney-client privilege into the definition of confidential information, prior constructions of the fraud exception may be relevant in interpreting the exceptions to confidentiality contained in RPC 1.6(b) and (c) . . . .”) (internal citation omitted). When construing the “crime or fraud” exception to the attorney-client privilege, “our courts have generally given the term 'fraud' an expansive reading." Fellerman v. Bradley, 99 N.J. 493, 503-04 (1985).
We likewise construe broadly the term “fraudulent act” within the meaning of RPC 1.6(c). So construed, the husband's deliberate omission of the existence of his illegitimate child constitutes a fraud on his wife. When discussing their respective estates with the firm, the husband and wife reasonably could expect that each would disclose information material to the distribution of their estates, including the existence of children who are contingent residuary beneficiaries. The husband breached that duty. Under the reciprocal wills, the existence of the husband's illegitimate child could affect the distribution of the wife's estate, if she predeceased him. Additionally, the husband's child support payments and other financial responsibilities owed to the illegitimate child could deplete that part of his estate that otherwise would pass to his wife.
From another perspective, it would be "fundamentally unfair" for the husband to reap the "joint planning advantages of access to information and certainty of outcome," while denying those same advantages to his wife. Teresa S. Collett, Disclosure, Discretion, or Deception: The Estate Planner's Ethical Dilemma from a Unilateral Confidence, 28 Real Prop. Prob. Tr. J. 683, 743 (1994). In effect, the husband has used the law firm's services to defraud his wife in the preparation of her estate.
The New Jersey RPCs are based substantially on the American Bar Association Model Rules of Professional Conduct ("the Model Rules"). RPC 1.6, however, exceeds the Model Rules in authorizing the disclosure of confidential information. A brief review of the history of the Model Rules and of RPC 1.6 confirms New Jersey's more expansive commitment to the disclosure of confidential client information.
In 1977, the American Bar Association appointed a Commission on Evaluation of Professional Standards, chaired by the late Robert J. Kutak. The Commission, generally known as the "Kutak Commission," originally proposed a rule that permitted a lawyer to disclose confidential information in circumstances comparable to those permitted by RPC 1.6. The House of Delegates of the American Bar Association, however, rejected the Kutak Commission's recommendation. As adopted by the American Bar Association, Model Rule 1.6(b) permits a lawyer to reveal confidential information only “to the extent the lawyer reasonably believes necessary to prevent the client from committing a criminal act that the lawyer believes is likely to result in imminent death or substantial bodily harm.” Unlike RPC 1.6, Model Rule 1.6 does not except information relating to the commission of a fraudulent act or that relating to a client's act that is likely to result in substantial financial injury. In no situation, moreover, does Model Rule 1.6 require disclosure. Thus, the Model Rules provide for narrower disclosure than that authorized by RPC 1.6.
In 1982, this Court appointed a committee to consider the Model Rules. The committee, chaired by the Honorable Dickinson R. Debevoise, became known as the "Debevoise Committee." It determined that the original provisions proposed by the Kutak Commission more closely reflected the existing ethics rules in New Jersey. Thus, the Committee concluded that Model Rule 1.6 would “narrow radically the circumstances in which New Jersey attorneys either may or must disclose the information of their clients' criminal or fraudulent behavior.” Report of the New Jersey Supreme Court Committee on the Model Rules of Professional Conduct (1983), reprinted in Michels, supra, Appendix D at 1043. When adopting the RPCs, this Court substantially followed the recommendation of the Debevoise Committee. Described as an “openly-radical experiment,” Geoffrey C. Hazard, Jr. & W. William Hodes, 2 The Law of Lawyering § AP4:104 (1998), RPC 1.6 "contained the most far-reaching disclosure requirements of any attorney code of conduct in the country," Leslie C. Levin, Testing the Radical Experiment: A Study of Lawyer Response to Clients Who Intend to Harm Others, 47 Rutgers L. Rev. 81, 92 (1994).
Under RPC 1.6, the facts support disclosure to the wife. The law firm did not learn of the husband's illegitimate child in a confidential communication from him. Indeed, he concealed that information from both his wife and the firm. The law firm learned about the husband's child through its representation of the mother in her paternity action against the husband. Accordingly, the husband's expectation of nondisclosure of the information may be less than if he had communicated the information to the firm in confidence.
In addition, the husband and wife signed letters captioned “Waiver of Conflict of Interest.” These letters acknowledge that information provided by one client could become available to the other. The letters, however, stop short of explicitly authorizing the firm to disclose one spouse's confidential information to the other. Even in the absence of any such explicit authorization, the spirit of the letters supports the firm's decision to disclose to the wife the existence of the husband's illegitimate child.
Neither our research nor that of counsel has revealed a dispositive judicial decision from this or any other jurisdiction on the issue of disclosure of confidential information about one client to a co-client. Persuasive secondary authority, however, supports the conclusion that the firm may disclose to the wife the existence of the husband's child.
The forthcoming Restatement of The Law Governing Lawyers § 112 comment l (Proposed Final Draft No. 1, 1996) ("the Restatement") suggests, for example, that if the attorney and the co-clients have reached a prior, explicit agreement concerning the sharing of confidential information, that agreement controls whether the attorney should disclose the confidential information of one co-client to another. Ibid. (“Co-clients . . . may explicitly agree to share information” and “can also explicitly agree that the lawyer is not to share certain information . . . with one or more other co-clients. A lawyer must honor such agreements.”); see also Report of the ABA Special Study Committee on Professional Responsibility: Comments and Recommendations on the Lawyer's Duties in Representing Husband and Wife, 28 Real Prop. Prob. Tr. J. 765, 787 (1994) (“Although legally and ethically there is no need for a prior discussion and agreement with the couple about the mode of representation, discussion and agreement are the better practice. The agreement may cover . . . the duty to keep or disclose confidences.”); American College of Trust and Estate Counsel, ACTEC Commentaries on the Model Rules of Professional Conduct 65-66 (2d ed. 1995) (“When the lawyer is first consulted by the multiple potential clients the lawyer should review with them the terms upon which the lawyer will undertake the representation, including the extent to which information will be shared among them.”).
As the preceding authorities suggest, an attorney, on commencing joint representation of co-clients, should agree explicitly with the clients on the sharing of confidential information. In such a “disclosure agreement," the co-clients can agree that any confidential information concerning one co-client, whether obtained from a co-client himself or herself or from another source, will be shared with the other co-client. Similarly, the co-clients can agree that unilateral confidences or other confidential information will be kept confidential by the attorney. Such a prior agreement will clarify the expectations of the clients and the lawyer and diminish the need for future litigation.
In the absence of an agreement to share confidential information with co-clients, the Restatement reposes the resolution of the lawyer's competing duties within the lawyer's discretion:
[T]he lawyer, after consideration of all relevant circumstances, has the . . . discretion to inform the affected co-client of the specific communication if, in the lawyer's reasonable judgment, the immediacy and magnitude of the risk to the affected co-client outweigh the interest of the communicating client in continued secrecy.
[Restatement (Third) of The Law Governing Lawyers,
supra, § 112 comment l.]
Additionally, the Restatement advises that the lawyer, when
withdrawing from representation of the co-clients, may inform the
affected co-client that the attorney has learned of information
adversely affecting that client's interests that the
communicating co-client refuses to permit the lawyer to disclose.
Ibid.
In the context of estate planning, the Restatement also
suggests that a lawyer's disclosure of confidential information
communicated by one spouse is appropriate only if the other
spouse's failure to learn of the information would be materially
detrimental to that other spouse or frustrate the spouse's
intended testamentary arrangement. Id. § 112 comment l,
illustrations 2, 3. The Restatement provides two analogous
illustrations in which a lawyer has been jointly retained by a
husband and wife to prepare reciprocal wills. The first
illustration states:
Lawyer has been retained by Husband and Wife
to prepare wills pursuant to an arrangement
under which each spouse agrees to leave most
of their property to the other (compare §
211, Comment c, Illustrations 1-3). Shortly
after the wills are executed, Husband
(unknown to Wife) asks Lawyer to prepare an
inter vivos trust for an illegitimate child
whose existence Husband has kept secret from
Wife for many years and about whom Husband
had not previously informed Lawyer. Husband
states that Wife would be distraught at
learning of Husband's infidelity and of
Husband's years of silence and that
disclosure of the information could destroy
their marriage. Husband directs Lawyer not
to inform Wife. The inter vivos trust that
Husband proposes to create would not
materially affect Wife's own estate plan or
her expected receipt of property under
Husband's will, because Husband proposes to
use property designated in Husband's will for
a personally favored charity. In view of the
lack of material effect on Wife, Lawyer may
assist Husband to establish and fund the
inter vivos trust and refrain from disclosing
Husband's information to Wife.
In authorizing non-disclosure, the Restatement explains that an
attorney should refrain from disclosing the existence of the
illegitimate child to the wife because the trust “would not
materially affect Wife's own estate plan or her expected receipt
of property under Husband's will.” Ibid.
The other illustration states:
Same facts as [the prior Illustration],
except that Husband's proposed inter vivos
trust would significantly deplete Husband's
estate, to Wife's material detriment and in
frustration of the Spouses' intended
testamentary arrangements. If Husband will
neither inform Wife nor permit Lawyer to do
so, Lawyer must withdraw from representing
both Husband and Wife. In the light of all
relevant circumstances, Lawyer may exercise
discretion whether to inform Wife either that
circumstances, which Lawyer has been asked
not to reveal, indicate that she should
revoke her recent will or to inform Wife of
some or all the details of the information
that Husband has recently provided so that
Wife may protect her interests.
Alternatively, Lawyer may inform Wife only
that Lawyer is withdrawing because Husband
will not permit disclosure of information
that Lawyer has learned from Husband.
Because the money placed in the trust would be deducted from the
portion of the husband's estate left to his wife, the Restatement
concludes that the lawyer may exercise discretion to inform the
wife of the husband's plans. Ibid.
An earlier draft of the Restatement described the attorney's
obligation to disclose the confidential information to the co-client as mandatory. Id. (Council Draft No. 11, 1995); cf.
Collett, supra, at 743 (arguing that nature of joint
representation of husband and wife supports mandatory disclosure
rule). When reviewing the draft, however, the governing body of
the American Law Institute, the Council, modified the obligation
to leave disclosure within the attorney's discretion.
Similarly, the American College of Trust and Estate Counsel
(ACTEC) also favors a discretionary rule. It recommends that the
“lawyer should have a reasonable degree of discretion in
determining how to respond to any particular case.” American
College of Trust and Estate Counsel, supra, at 68. The ACTEC
suggests that the lawyer first attempt to convince the client to
inform the co-client. Ibid. When urging the client to disclose
the information, the lawyer should remind the client of the
implicit understanding that all information will be shared by
both clients. The lawyer also should explain to the client the
potential legal consequences of non-disclosure, including
invalidation of the wills. Ibid. Furthermore, the lawyer may
mention that failure to communicate the information could subject
the lawyer to a malpractice claim or disciplinary action. Ibid.
The ACTEC reasons that if unsuccessful in persuading the
client to disclose the information, the lawyer should consider
several factors in deciding whether to reveal the confidential
information to the co-client, including: (1) duties of
impartiality and loyalty to the clients; (2) any express or
implied agreement among the lawyer and the joint clients that
information communicated by either client to the lawyer regarding
the subject of the representation would be shared with the other
client; (3) the reasonable expectations of the clients; and (4)
the nature of the confidence and the harm that may result if the
confidence is, or is not, disclosed. Id. at 68-69.
The Section of Real Property, Probate and Trust Law of the
American Bar Association, in a report prepared by its Special
Study Committee on Professional Responsibility, reached a similar
conclusion:
Faced with any adverse confidence, the lawyer
must act as a fiduciary toward joint clients.
The lawyer must balance the potential for
material harm to the confiding spouse caused
by disclosure against the potential for
material harm to the other spouse caused by a
failure to disclose.
[Report of the Special Study Committee on Professional
Responsibility: Comments and Recommendations on the Lawyer's
Duties in Representing Husband and Wife, supra, 28 Real Prop.
Prob. Tr. J. at 787.]
The report stresses that the resolution of the balancing
test should center on the expectations of the clients. Id. at
784. In general, “the available ruling authority . . . points
toward the conclusion that a lawyer is not required to disclose
an adverse confidence to the other spouse.” Id. at 788. At the
same time, the report acknowledges, as did the Restatement, that
the available ruling authority is “scant and offers little
analytical guidance.” Id. at 788 n.27.
The Professional Ethics Committees of New York and Florida,
however, have concluded that disclosure to a co-client is
prohibited. New York State Bar Ass'n Comm. on Professional
Ethics, Op. 555 (1984); Florida State Bar Ass'n Comm. on
Professional Ethics, Op. 95-4 (1997).
The New York opinion addressed the following situation:
A and B formed a partnership and employed
Lawyer L to represent them in connection with
the partnership affairs. Subsequently, B, in
a conversation with Lawyer L, advised Lawyer
L that he was actively breaching the
partnership agreement. B preceded this
statement to Lawyer L with the statement that
he proposed to tell Lawyer L something “in
confidence.” Lawyer L did not respond to
that statement and did not understand that B
intended to make a statement that would be of
importance to A but that was to be kept
confidential from A. Lawyer L had not, prior
thereto, advised A or B that he could not
receive from one communications regarding the
subject of the joint representation that
would be confidential from the other. B has
subsequently declined to tell A what he has
told Lawyer L.
[New York State Bar Ass'n Comm. on
Professional Ethics, Op. 555,
supra.]
In that situation, the New York Ethics Committee concluded that
the lawyer may not disclose to the co-client the communicating
client's statement. The Committee based its conclusion on the
absence of prior consent by the clients to the sharing of all
confidential communications and the fact that the client
“specifically in advance designated his communication as
confidential, and the lawyer did not demur.” Ibid.
The Florida Ethics Committee addressed a similar situation:
Lawyer has represented Husband and Wife for
many years in a range of personal matters,
including estate planning. Husband and Wife
have substantial individual assets, and they
also own substantial jointly-held property.
Recently, Lawyer prepared new updated wills
that Husband and Wife signed. Like their
previous wills, their new wills primarily
benefit the survivor of them for his or her
life, with beneficial disposition at the
death of the survivor being made equally to
their children.
Several months after the execution of the new
wills, Husband confers separately with
Lawyer. Husband reveals to Lawyer that he
has just executed a codicil (prepared by
another law firm) that makes substantial
beneficial disposition to a woman with whom
Husband has been having an extra-marital
relationship.
[Florida State Bar Ass'n Comm. on
Professional Ethics, Op. 95-4,
supra.]
Reasoning that the lawyer's duty of confidentiality takes
precedence over the duty to communicate all relevant information
to a client, the Florida Ethics Committee concluded that the
lawyer did not have discretion to reveal the information. In
support of that conclusion, the Florida committee reasoned that
joint clients do not necessarily expect that everything relating
to the joint representation communicated by one co-client will be
shared with the other co-client.
In several material respects, however, the present appeal
differs from the hypothetical cases considered by the New York
and Florida committees. Most significantly, the New York and
Florida disciplinary rules, unlike RPC 1.6, do not except
disclosure needed “to rectify the consequences of a client's . .
. fraudulent act in the furtherance of which the lawyer's
services had been used.” RPC 1.6(c). But see New York Code of
Professional Responsibility DR 4-101; Florida Rules of
Professional Conduct 4-1.6. Second, Hill Wallack learned of the
husband's paternity from a third party, not from the husband
himself. Thus, the husband did not communicate anything to the
law firm with the expectation that the communication would be
kept confidential. Finally, the husband and wife, unlike the co-clients considered by the New York and Florida Committees, signed
an agreement suggesting their intent to share all information
with each other.
Because Hill Wallack wishes to make the disclosure, we need
not reach the issue whether the lawyer's obligation to disclose
is discretionary or mandatory. In conclusion, Hill Wallack may
inform the wife of the existence of the husband's illegitimate
child.
Finally, authorizing the disclosure of the existence, but
not the identity, of the child will not contravene N.J.S.A. 9:17-42, which provides:
All papers and records and any information
pertaining to an action or proceeding held
under [the New Jersey Parentage Act] which
may reveal the identity of any party in an
action, other than the final judgment or the
birth certificate, whether part of the
permanent record of the court or of a file
with the State registrar of vital statistics
or elsewhere, are confidential and are
subject to inspection only upon consent of
the court and all parties to the action who
are still living, or in exceptional cases
only upon an order of the court for
compelling reason clearly and convincingly
shown.
The law firm learned of the husband's paternity of the child
through the mother's disclosure before the institution of the
paternity suit. It does not seek to disclose the identity of the
mother or the child. Given the wife's need for the information
and the law firm's right to disclose it, the disclosure of the
child's existence to the wife constitutes an exceptional case
"for compelling reason clearly and convincingly shown."
The judgment of the Appellate Division is reversed and the
matter is remanded to the Family Part.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, GARIBALDI, STEIN, and COLEMAN join in JUSTICE POLLOCK's opinion. JUSTICE O'HERN did not participate.
NO. A-86 SEPTEMBER TERM 1998
ON APPEAL FROM Appellate Division, Superior Court
ON CERTIFICATION TO
A., individually and on behalf of
minor child, C.,
Plaintiff,
v.
B.,
Defendant and Third-Party
Plaintiff-Respondent,
v.
HILL WALLACK, Attorneys at Law,
Third-Party
Defendant-Appellant.
DECIDED April 15, 1999
Chief Justice Poritz PRESIDING
OPINION BY Justice Pollock
CONCURRING OPINION BY
CONCURRING/DISSENTING OPINION BY
Footnote: 1 Rule 2:8-3(a) provides:
Motion for Summary Disposition
(a) Supreme Court. On an appeal taken to the Supreme Court as of right from a judgment of the Appellate Division, any party may move at any time following the service of the notice of appeal for a summary disposition of the appeal. Such motion shall be determined on the motion papers and on the briefs and record filed with the Appellate Division and may result in an affirmance, reversal or modification. The pendency of such motion shall toll the time for the filing of briefs and appendices on the appeal. The Supreme Court may summarily dispose of any appeal on its own motion at any time, and on such prior notice, if any, to the parties as the Supreme Court directs.