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Ethics Opinion

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RI-151

December 21, 1992

SYLLABUS

    A lawyer who learns that a client's statements in court pleadings or to a tribunal are false and material, must counsel that if the client does not rectify the false statements the lawyer has a duty to do so. If the client still refuses to rectify the statements, the lawyer is required to rectify.

    References: MRPC 1.2(c) and (d), 1.6(a) and (c), 3.3(a).

TEXT

A lawyer is seeking to adjudicate the validity and enforcement of a lien upon the clients' real estate. The property is titled in the name of the clients' son. The clients' son is also a party to the litigation and is represented by separate counsel. The nature of the claim is that the property was placed in the name of the son by the clients so as to avoid attachment, and the son holds the property as a "nominee" of the clients. The clients answered the complaint, under oath, and also answered interrogatories and request for admissions asserting that they are not and have never been the owners of the property. The clients admitted to using the property, but assert that this was pursuant to a verbal lease agreement with the clients' son. Before an answer was filed to the complaint, the lawyer spoke with the son and was advised that the son was the owner of the property and confirmed the existence of the "lease agreement" between the son and the parents.

The deposition of the son was scheduled. Prior to the son's deposition, the lawyer was advised that if the son was to be deposed the son would have to either perjure himself or, by telling the truth, admit that the son's interest in the property was one of record title only and the son had no financial interest in the property. The son advised that the property was purchased by the parents and placed in the son's name so that it could not be attached by the parent's creditors.

The lawyer addressed the son's retraction of the son's position with the clients. The clients advised the lawyer that this was, in fact, the case. The clients were advised that they had submitted false testimony and defenses to the court, and that they were required to retract same. The clients were also advised that if authority were not provided to retract the false defenses and assertions, the lawyer would be required to withdraw from further representation. The clients have failed to authorize the lawyer to retract what is now known to be false.

Two efforts were made by the lawyer to withdraw. Neither of the motions for withdrawal included a disclosure of the false statements made by the clients. The court twice denied the lawyer's motions for withdrawal. The time for discovery is nearly complete. The clients refused to appear at the scheduled depositions, claiming that the husband is suffering serious health problems and the wife cannot leave the husband for purposes of having a deposition taken. The lawyer questions the veracity of the health claims.

The lawyer asks what further ethics duties the lawyer owes under the circumstances.

The clients' confessions to the lawyer concerning the "lease agreement" were clearly "confidences" as defined in MRPC 1.6(a), which states:

    "(a) 'Confidence' refers to information protected by the client-lawyer privilege under applicable law, and 'secret' refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client."

A lawyer may not reveal confidences except in accord with MRPC 1.6(c) which states:

    "(c) A lawyer may reveal:

      "(1) confidences or secrets with the consent of the client or clients affected, but only after full disclosure to them;

      "(2) confidences or secrets when permitted or required by these rules, or when required by law or by court order;

      "(3) confidences or secrets to the extent reasonably necessary to rectify the consequences of a client's illegal or fraudulent act in the furtherance of which the lawyer's services have been used;

      "(4) the intention of a client to commit a crime and the information necessary to prevent the crime; and

      "(5) confidences or secrets necessary to establish or collect a fee, or to defend the lawyer or the lawyer's employees or associates against an accusation of wrongful conduct." Emphasis added.

Pursuant to MRPC 1.6(c)(3), a lawyer may reveal confidences and secrets to the extent reasonably necessary to rectify the consequences of a client's illegal or fraudulent act and furtherance of which the lawyer's services have been used. Since an answer and other pleadings have been filed in this action, which include statements which the lawyer now knows to be false, the lawyer's services have already been used to further the clients' fraud and the provisions of MRPC 1.6(c)(3) apply.

In discussing the discretion given to a lawyer under MRPC 1.6(c)(4), the comment states in part:

    "As stated in paragraph (c)(4), the lawyer has professional discretion to reveal information in order to prevent a client's criminal act . . . .

    "The lawyer's exercise of discretion requires consideration of such factors as magnitude, proximity, and likelihood of the contemplated wrong; the nature of the lawyer's relationship with the client and with those who might be injured by the client; the lawyer's own involvement in the transaction; and factors that may extenuate the conduct in question. Where practical, the lawyer should seek to persuade the client to take suitable action. In any case, a disclosure adverse to the client's interest should be no greater than the lawyer reasonably believes necessary to the purpose. A lawyer's decision not to make a disclosure permitted by paragraph (c) does not violate this rule."

MRPC 3.3(a) mandates a lawyer's conduct in the following situations:

    "(a) A lawyer shall not knowingly:

      "(1 )make a false statement of material fact or law to a tribunal;

      "(2) fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client;

      "(3) fail to disclose to a tribunal controlling legal authority in the jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; or

      "(4) offer evidence that the lawyer knows to be false. If a lawyer has offered material evidence and comes to know of its falsity, the lawyer shall take reasonable remedial measures."

In this inquiry, there is no question that the information submitted by way of answer to the complaint, answer to the interrogatories, and answer to request for admissions is false. If the lawyer had determined that the clients' statements were fraudulent prior to MPRC 3.3 being triggered, i.e., before the false pleadings had been filed with the court or used in court proceedings, MRPC 1.6(c) would have allowed the lawyer to reveal confidences to support the lawyer's motion to withdraw. Such disclosure to the tribunal in support of a motion to withdraw should be made in camera.

Since the lawyer did not know the falsity of the statements until after the clients' fraudulent answer had been filed, MRPC 3.3(a)(2) is triggered. There appears to be no question that the information concerning the "lease agreement" is material, since it goes to the heart of the pending litigation. The comment to MRPC 3.3 provides in part:

    "Upon ascertaining that material evidence is false, the lawyer should seek to persuade the client that the evidence should not be offered or, if it has been offered, that its false character should immediately be disclosed. If the persuasion is ineffective, the lawyer must take reasonable remedial measures.

    ". . . if necessary to rectify the situation, an advocate must disclose the existence of the client's deception to the court or to the other party."

Thus upon discovery of the clients' falsehoods, the lawyer has a duty pursuant to MRPC 1.2(c) and (d) to fully counsel the clients regarding the legal consequences of the clients' acts, that the services of the lawyer cannot be used to further the clients' acts, and that pursuant to MRPC 3.3 the lawyer has a duty to reveal the clients' acts to the tribunal if they refuse to rectify. Since MRPC 3.3 has been triggered, if the lawyer is not able to convince the clients to rectify, the lawyer must do so; withdrawal would not vitiate the lawyer's duty once MRPC 3.3 has been triggered.

In this instance "rectifying" could take the course of filing supplemental pleadings and supplemental answers to the interrogatories, settling the case on terms requiring the clients' to pay full value to creditors, executing a stipulation regarding the clients' equitable ownership in the property, or an in camera disclosure to the court, with opposing counsel present, of the clients' admissions.

 
     

 

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