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In re Lanza | 322 A.2d 445 (1974)
Under the Model Rules of Professional Conduct, lawyers have a duty of loyalty to each client and may not represent a client if the representation would involve a conflict of interest.
However, a client may waive a conflict of interest by giving knowing and informed consent. But what if a lawyer wishes to represent a buyer and seller in a real estate closing? Must the lawyer first obtain consent? The New Jersey Supreme Court considered this question in the case In re Lanza.
In 1971, Elizabeth Greene hired attorney Guy Lanza to represent her in the sale of her home in Palisades Park, New Jersey. Around the same time, James and Joan Connolly agreed to purchase the home from Greene, with a separate broker drafting the parties' agreement.
The sales contract was signed in Lanza's office, though he didn't help in negotiating terms. Lanza then agreed to represent the Connollys in the real estate closing. But Lanza didn't talk to Greene first about representing the Connollys.
Under the contract, the parties agreed to a sale price of $36,000. The contract provided for a closing date in July of that year, but the parties initially agreed at Greene's request to postpone the date until September. However, due to a change in circumstances, Greene wished
to move the closing back to the original July date. The Connollys agreed but told Greene that they wouldn't have the full funds to complete the purchase. The parties then agreed to close on the July date for $35,000, and the Connollys agreed to provide a check for $1,000 postdated approximately 30 days after the closing.
The closing took place, and Greene received the Connollys' check in the amount of $1,000. But when Greene attempted to deposit the check one month later, the check bounced due to insufficient funds. When Greene contacted the Connollys, they informed her that they wouldn't deposit the funds into their account because they discovered a serious water condition in the cellar that would cost $1,000 to fix.
Greene then contacted Lanza regarding the situation, but Lanza didn't take any action on her behalf. Ultimately, Greene hired another attorney and sued the Connollys in state court.
Subsequently, the Bergen County Ethics Committee filed a disciplinary proceeding, or presentment, against Lanza for ethical violations in New Jersey Supreme Court.
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