May a staff attorney employed by an insurance company continue to represent a defendant in a lawsuit brought by a plaintiff when both the plaintiff and the defendant are insured by the insurance company and when, during the course of the representation, the staff attorney learns the insurance company took a recorded statement from the plaintiff without advising the plaintiff that the statement might be used against her in a legal proceeding?
Plaintiff sued Defendant for personal injury damages sustained in an automobile accident. Both Plaintiff and Defendant are insured by the same insurance company (the “Company”). The Company assigned Defendant’s defense to a staff attorney, who filed an answer for Defendant and served a Request for Disclosure on Plaintiff. In her response to the Request for Disclosure, Plaintiff revealed that the Company had taken a recorded statement from Plaintiff before she filed suit. The statement was taken without the staff attorney’s knowledge or involvement. The statement was favorable to Defendant.
Plaintiff’s attorney acknowledged that the insurance adjuster who took the statement told Plaintiff that it was being recorded and might be shared with other insurance adjusters, but Plaintiff’s attorney contends that the staff attorney cannot use the statement against Plaintiff because the Company allegedly violated its duty of good faith and fair dealing by taking the statement without warning Plaintiff that it might be used against her in any personal injury lawsuit she might file. In view of this contention, the staff attorney wants to know whether there is any ethical prohibition against him continuing to represent Defendant.
Tex. Comm. On Professional Ethics, Op. 668 (2017)