March 8, 1993
A lawyer is not under an ethical obligation to express misgivings to a third person about the insurability of the title conveyed by quitclaim deeds that the lawyer prepares for a client.
References: MRPC 1.2(a), 1.13(a), 4.1, 4.3, 8.4; MCLA 565.3; Friedman v. Dozorc, 412 Mich 1, 312 NW2d 585 (1981); Lucking v. Barker, 274 Mich 103, 264 NW 306 (1936).
A city receives a number of conveyances from the State of Michigan by quitclaim deed of property that had previously been acquired by the state as a result of delinquent taxes proceedings. In order to return the property to the local tax rolls the city sells the property at bid and conveys to the purchasers by quitclaim deeds.
An assistant city attorney has been asked to prepare the quitclaim deeds. The attorney reports that title insurance companies will not ensure such parcels as to marketable title for reasons best known to the companies. The lawyer also believes that the state may use flawed procedures in its acquisition of the lands because of litigation the lawyer has been involved in, notwithstanding savings language in the tax sale statutes. The attorney asks whether it is ethical to prepare the quitclaim deeds for property which is not insurable as to title, and whether the attorney has a duty to advise prospective purchasers that they may not necessarily be receiving good or insurable title to such lands. If notice is required, the attorney asks what language would be sufficient to include in an offer to purchase.
As a matter of substantive law under Friedman v. Dozorc, 412 Mich 1, 312 NW2d 585 (1981), a lawyer owes no actionable duty to an adverse party. Clearly the lawyer's duty is toward the client city for whom the lawyer is preparing the deeds. MRPC 1.13(a).
MRPC 1.2(a) states:
"(a) A lawyer shall seek the lawful objectives of a client through reasonably available means permitted by law and these rules. A lawyer does not violate this rule by acceding to reasonable requests of opposing counsel which do not prejudice the rights of the client, by being punctual in fulfilling all professional commitments, by avoiding offensive tactics, or by treating with courtesy and consideration all persons involved in the legal process. A lawyer shall abide by a client's decision whether to accept an offer of settlement or mediation evaluation of a matter. In a criminal case, the lawyer shall abide by the client's decision, after consultation with the lawyer, as to a plea to be entered, whether to waive jury trial, and whether the client will testify. In representing a client, a lawyer may, where permissible, exercise professional judgment to waive or fail to assert a right or position of the client."
A quitclaim deed will pass all the interest which a grantor has to convey [MCLA 565.3; MSA 26.522; Lucking v. Barker, 274 Mich 103, 264 NW 306 (1936)]. In this case there is no suggestion that the city is attempting to do anything other than convey to a prospective purchaser whatever title the city has to the property by means of the same type of conveyance by which the client acquired the property in the first place. The client is not engaged in illegal or fraudulent conduct. MRPC 8.4 states:
"It is professional misconduct for a lawyer to:
"(a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another;
"(b) engage in conduct involving dishonesty, fraud, deceit, misrepresentation, or violation of the criminal law, where such conduct reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer;
"(c) engage in conduct that is prejudicial to the administration of justice;
"(d) state or imply an ability to influence improperly a government agency or official; or
"(e) knowingly assist a judge or judicial officer in conduct that is a violation of the Code of Judicial Conduct or other law."
There is no suggestion that the lawyer has been asked to engage in any kind of misconduct in violation of MRPC 8.4. Nor would the lawyer's services involve activity prohibited by MRPC 4.1, which states:
"In the course of representing a client, a lawyer shall not knowingly make a false statement of material fact or law to a third person."
MRPC 4.3 prohibits a lawyer, when dealing with unrepresented persons, from stating or implying that the lawyer is disinterested, and requires the lawyer to correct any misunderstanding about the lawyer's role. It is possible that the city attorney's role as counsel for the city would be misunderstood by unrepresented prospective purchasers who may mistakenly believe that the city attorney would look out for, and have responsibilities toward, the public and who may not understand the force and effect of a quitclaim deed. In such cases the city attorney should make reasonable efforts to correct the misunderstanding.
Under the facts provided, the city attorney does not violate ethics rules by preparing the quitclaim deeds, and is not required to explain or disclose any personal doubts about the insurability of the deeds to a prospective purchaser.