Can a lawyer serve as a referee in a foreclosure case when one of the lawyer's clients holds a judgment on the property?

Plain-English summary

A lawyer was offered appointment as a referee in a mortgage foreclosure. A credit-union client of the lawyer held a judgment on the property being foreclosed, but the credit union was not the foreclosing mortgagee, and the lawyer had not obtained that judgment for the credit union and did not represent it in connection with the judgment (only on unrelated mortgage loans). The lawyer asked whether he could accept the appointment.

The opinion separates two sets of constraints. First, confidentiality: even as a referee, the lawyer must comply with Rule 1.6(a) (no revealing or using confidential information to a client's disadvantage absent informed consent), Rule 1.8(b) (no using information relating to the representation to the client's disadvantage absent consent), and Rule 1.9(c) (similar limits for former clients). Those limits do not automatically bar serving as referee, but if complying with them would make it impossible to perform the referee's duties fully and faithfully, the lawyer would have to decline absent the client's consent.

Second, conflicts. The opinion observes that as a referee the lawyer is not representing a client but performing duties for the appointing court, so the representation-based conflict rules (Rules 1.7 and 1.9(a)-(b)) do not apply. What does apply is the judicial-ethics conflict rule: under 22 NYCRR 100.6(A), persons performing judicial functions must comply with Part 100 in performing those functions, and a foreclosure referee performs judicial functions. Section 100.3(E)(1) requires disqualification where impartiality might reasonably be questioned, with a non-exhaustive list. The opinion directs the lawyer to assess the scope of the appointment, noting that more discretion (for example, resolving disputed amounts of the mortgage debt, which affects the "upset price" and the chance of surplus funds available pro rata to judgment creditors like the credit union) gives more reason to question impartiality, while a purely ministerial calculation or sale gives less. If disqualification is not required, the lawyer may still have a disclosure obligation under the judicial-conduct commentary (Canon 3(E)(1), Comment 3.22), and should consider advising the court or parties of his ongoing unrelated representation of the credit union, by letter if there is no record proceeding.

In practice

Under this opinion, and under the New York rules as they stood at the time, the referee role is governed by judicial-conduct disqualification standards rather than the representation-based conflict rules, because the referee is not representing a client. The lawyer's path is to evaluate whether the scope of the reference involves enough discretion that impartiality could reasonably be questioned, to disclose his unrelated representation of the judgment-creditor client where the judicial-conduct rules call for it, and to keep within the confidentiality limits of Rules 1.6 and 1.8(b) (and 1.9(c) for former clients) on the client's information while serving.

Common questions

Q: Do the lawyer-conflict rules (Rules 1.7 and 1.9) bar serving as a referee for a case touching a client?

A: No. The opinion explains that as a referee the lawyer is not representing a client but performing duties for the appointing court, so the representation-based conflict provisions of Rules 1.7 and 1.9(a)-(b) do not apply.

Q: What standard does apply to the referee's impartiality?

A: The judicial-conduct rules. Under 22 NYCRR 100.6(A), a person performing judicial functions must follow Part 100, and Section 100.3(E)(1) requires disqualification where impartiality might reasonably be questioned.

Q: When is impartiality more likely to be questioned?

A: The opinion ties it to discretion. Resolving disputed amounts that affect surplus funds available to the client judgment creditor raises more concern, while a ministerial computation or sale raises little.

Q: Can the lawyer use what he knows about the client while acting as referee?

A: No, not to the client's disadvantage. Absent the client's consent, Rules 1.6(a), 1.8(b), and 1.9(c) bar revealing or using the client's confidential or representation-related information against the client.

Background and rules framework

The opinion applies the confidentiality rules, Rule 1.6(a) (Model Rule 1.6) and Rule 1.8(b) (Model Rule 1.8, treated here for its information-use limit), with Rule 1.9(c) (Model Rule 1.9) for former-client information. The conflict analysis turns on the judicial-conduct rules in 22 NYCRR Part 100, specifically 100.6(A) (application to those performing judicial functions) and 100.3(E)(1) (disqualification where impartiality might reasonably be questioned), and the related Code of Judicial Conduct Canon 3(E)(1) commentary on disclosure.

Citations and references

Rules of Professional Conduct:

• MR 1.6 / NY 1.6(a) (confidentiality)
• MR 1.8 / NY 1.8(b) (use of information to a client's disadvantage)
• MR 1.9 / NY 1.9(c) (former-client information); NY 1.7, 1.9(a)-(b) (representation conflicts, found inapplicable)

Rules and codes:

• 22 NYCRR 100.6(A) (Part 100 applies to those performing judicial functions)
• 22 NYCRR 100.3(E)(1) (disqualification where impartiality might reasonably be questioned)
• Code of Judicial Conduct Canon 3(E)(1), Comments 3.21 and 3.22 (disclosure)

Other opinions cited:

• Advisory Committee on Judicial Ethics Opinion 10-50: court attorney referees are subject to the judicial-conduct rules in performing judicial functions

See also

• NY State Bar Op. 922: Conflicts arising from a previous representation
• NY State Bar Op. 925: Defense counsel whose partner is in business with a prosecutor
• NY State Bar Op. 953: Contributing to a portrait of a retiring judge

Source

• Landing page: https://nysba.org/ethics-opinion-924/