In 1995-96, the inquirer represented plaintiffs A, B and Insurance Company C in a lawsuit against D for loss of cargo (food stuffs) imported by ship and stored in defendant D's facility. D filed for bankruptcy while the food stuffs were stored in D's facility. Y Bank foreclosed on D's facility, thereby limiting A, B and Insurance Company C to proceeding against D's insurance policies, including those issued by Insurance Company E and Insurance Company F. Insurance Company E defended the case under a reservation of rights. Insurance Company F disclaimed any liability for the loss and declined to participate. The Inquirer's clients, A, B and Insurance Company C, settled with several defendants (including Y Bank) and obtained a judgment against D.
Insurance Company C has asked the inquirer to proceed with satisfying the outstanding judgment against D, including executing on any insurance policies that might have been applicable. Insurance Company E filed a declaratory judgment alleging that it was not liable under its policy to D. That case was settled, leaving a large portion of the inquirer's clients' judgment against D unsatisfied. Based on information obtained from D's insurance broker, the inquirer believes that there may be coverage under one or more of Insurance Company F's policies that were issued to D. As a result, Insurance Company C wishes the inquirer to proceed against Insurance Company F's policies in an attempt to satisfy the judgment.
The inquirer is seeking the Committee's opinion because he has previously represented and is presently defending G, one of Insurance Company F's assureds, in an unrelated matter. The inquirer has never represented Insurance Company F however. The inquirer queries whether it may proceed against Insurance Company F without obtaining the consent of Insurance Company C, Insurance Company F, and/or G.
The issue presented by this inquiry is whether the inquirer would have a conflict of interest under Rule 1.7 by simultaneously representing both (1) Insurance Company C in its claim against Insurance Company F and (2) one of Insurance Company F's assureds, G, in an unrelated matter. The critical fact is that the inquirer does not represent Insurance Company F. Rather, the inquirer represents only G, whose interests are not directly adverse to those of Insurance Company C. Thus, based on the facts provided by the inquirer, the Inquirer's representation of both Insurance Company C and G will not present a conflict of interest under Rule 1.7(a). The same analysis holds true under Rule 1.7(b), although the inquirer must under Rule 1.7(b) continually evaluate whether its representation of each client (Insurance Company C and G) may be materially limited by the inquirer's ongoing responsibilities to the other client. Even if the inquirer has no ethical obligation to obtain the consent of Insurance Company C and G, the Inquirer may believe that, as a matter of client relations, it should disclose the existence of the representations to each client. Of course, absent appropriate consent, such disclosure may not reveal any confidential information the inquirer has obtained from either client (Insurance Company C and G). See Rule 1.6.