Friday, October 15, 2010

All in the Family


We have all learned in Ethics that it is unethical for a lawyer to represent both sides.  What if it is family and everyone trusts each other?  Would you still go through the trouble of obtaining your own legal counsel to do business with your parents?  The more I read, the more I know that I would.  No matter how good your relationship is with your family people sometimes make poor judgments that hurt others.  The following family learned this lesson the hard way:

In this case the plaintiff was working on a deal to sell his business to his son and daughter-in-law.  The purchase price would be calculated according to the profits of the business when it was under the control of his son.  The dilemma comes with the entrance of the attorney.  Not only was the attorney representing both parties, but he was also a member of the board of directors for the company.

The plaintiff alleged that the attorney failed to share information with him that showed the son and daughter-in-law participated in unauthorized actions to lower the value of the company.  The plaintiff's case was brought to trial and the presiding judge determined that the attorney had engaged in misconduct.

If you are interested in reading the case, the cite is:   50 A.D.3d 667.

The lesson learned in this instance is to take precautions in business, even when dealing with family members.

Legal Malpractice Article

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3 comments:

  1. Ellen C StamperOctober 17, 2010 at 3:08 PM

    Your point is very well taken. I guess if we learn anything at all, it should be that when people are involved, trust no one! Maybe that is overstating things a bit, but I do believe that money and family just don't mix. It is human nature to look out for yourself, and when that propensity rears its head in the course of a legal situation involving family it gets very ugly.

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  2. abigailOctober 17, 2010 at 11:49 PM

    This is a very tough conflict of interest. I think it is best not to mix family situations with business. Especially in this situation, it is very conflicting. If I were the attorney I will talk both of them into getting an attorney and stay a father, a father in law, and a member of the board of the director of the company, and not get legal matters mixed up in all of this

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  3. Dave MosherOctober 20, 2010 at 10:20 PM

    Some good information. It has often been said that blood is thicker than water; however I believe that when it comes to a family business such as what is illustrated here, that an outside attorney is the best route to follow.
    It's alright to keep the business in the family,
    but let's make sure that the attorney(s) are fair and impartial and don't stand to gain where it would create a conflict of interest.

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