May a municipal attorney defend both the municipality and its officials when they are sued for fraud, and when must special counsel be brought in?

Plain-English summary

An insurer had sued a municipality and joined certain of its officials, claiming the defendants made willful misrepresentations and committed fraud in seeking indemnity beyond their lawful contractual entitlement. The inquirer asked whether the municipal attorney could represent both the municipality and one or more of the official-defendants, and whether, given the attorney's daily contact with the officials in regular municipal business, it was proper for the municipal attorney to represent the municipality alone or whether special counsel had to be engaged.

On the first question, the Committee concluded the municipal attorney may not undertake the defense of both the public body and its officials where the charges are, or are likely to be, fraud or willful misrepresentation, that is, where the official has exceeded the scope of his authority (citing Opinions 174 and 187 and N.J.S.A. 59:3-14 and 59:2-10). On the second, the Committee reasoned that the municipal attorney, as chief law officer, has a duty to protect the municipality in all litigation affecting it, and that where the co-defendants are former municipal officials there is no question the attorney may defend the municipality. But because that duty requires the attorney to exercise professional judgment for the municipality free of any bias for or against officials with whom he is in continual day-to-day contact, the Committee held that if the professional contact with the co-defendant official is substantial and continuing, special counsel should be engaged to defend the municipality (citing Perillo v. Advisory Committee on Professional Ethics). It noted that although this brings some additional expense, the result should benefit the municipality.

Currency note

This opinion was issued in 1984, before New Jersey's adoption of the 2004 revisions to the Rules of Professional Conduct. The concurrent-conflict analysis it applies now lives in RPC 1.7. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could a municipal attorney defend both the town and an official sued for fraud?

A: No. The opinion concluded the municipal attorney may not defend both where the charges are fraud or willful misrepresentation, because the official would have acted outside the scope of his authority.

Q: Could the municipal attorney at least defend the municipality alone?

A: Sometimes. The opinion held the attorney may defend the municipality, but that special counsel should be engaged if his substantial, continuing day-to-day contact with the co-defendant official could hazard his independent judgment for the municipality.

Q: Did added cost justify keeping the municipal attorney on alone?

A: No. The opinion acknowledged special counsel brings additional expense but concluded the result should still benefit the municipality.

Background and rules framework

The opinion applies the conflict-of-interest principle now found in RPC 1.7 to a public body and its officials sued together, drawing on the Supreme Court's Perillo decision and the New Jersey Tort Claims Act indemnification provisions (N.J.S.A. 59:3-14 and 59:2-10). It is the opinion later applied in Opinion 534 to Section 1983 suits against officials.

Citations and references

Rules of Professional Conduct:

• MR 1.7 / NJ RPC 1.7 (concurrent conflicts of interest)

Statutes:

• N.J.S.A. 59:3-14 and N.J.S.A. 59:2-10 (Tort Claims Act; no indemnity for conduct outside the scope of employment / actual fraud or willful misconduct)

Cases:

• Perillo v. Advisory Committee on Professional Ethics (independent judgment of public-body counsel)

Other opinions cited:

• NJ ACPE Opinions 174 and 187 (municipal attorney's representation of the public body and its officials)

See also

• NJ ACPE Op. 534: Municipal Counsel Defending Officials in Section 1983 Suits
• NJ ACPE Op. 605: Public Entities and Private Co-Defendants in Multiparty Suits
• NJ ACPE Op. 588: Multiple Representation of Public Entities in an Environmental Suit

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp526-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Reproduced from a full-text mirror of the official opinion for research purposes. The linked official source controls.

Full opinion text unavailable from the official source; see the linked source above for the complete text.