Legal Ethics Opinion #1521

Conflict of Interest - Personal Interest Affecting
Representation:  Attorney Representing Builder When Title Company
in Which Attorney Has an Ownership Interest Serves As Mechanics
Lien Agent for Builder  

You have presented a hypothetical situation in which Lawyer A has
an ownership interest in Title Company B and also represents
Developer C.  Title Company B has been asked, and has agreed to
act, as a mechanic's lien agent, and as a disbursing agent, for C
pursuant to Virginia Code 43-1.01(D).  Lawyer A represents
Developer C in connection with the same project for which Title
Company B has been designated as a mechanic's lien agent and
disbursing agent.  You further indicate that no bill of complaint
has been filed and that the situation described arises at the
beginning of the attorney-client relationship.  

You have asked the committee to opine whether, under the facts of
the inquiry, and assuming full disclosure by Lawyer A to
Developer C of A's interest in Title Company B, and assuming
consent by C, it is ethical for Lawyer A to represent C when it
is possible that B might be called to testify as a mechanic's
lien agent or disbursing agent.

The appropriate and controlling Disciplinary Rule related to your
inquiry is DR 5-101(A), which states that a lawyer shall not
accept employment if the exercise of his professional judgment on
behalf of his client may be affected by his own financial,
business, property, or personal interests, except with the
consent of his client after full and adequate disclosure under
the circumstances.  

The committee is of the view that the attorney-as-witness
provisions DRs 5-101(B), 5-102 (A) and (B) are inapplicable to
the specific question you have raised, since your facts indicate
that Title Company B, rather than Lawyer A, may be called to
testify.  The committee has earlier addressed the question of
whether an attorney/mechanic's lien agent may serve as a witness.
See LEO #1474.

Under the applicable DR 5-l0l(A) and the facts you present which
assume that full disclosure of Lawyer A's interest in Title
Company B has been made to Developer C, who has consented, the
committee opines that it would not be improper for A to represent
C on the same project for which B has been designated as
mechanic's lien agent and disbursing agent, even if there is a
possibility that B may be called to testify on the project.

Committee Opinion
May 11, 1993