Ethics Ohio Land Title Association September 2015 Presented by - PDF document

Ethics Ohio Land Title Association September 2015 Presented by Amelia A. Bower Overview of Disciplinary Process  Disciplinary Process  Sanctions/Interim Suspensions  Mitigation/Aggravation  Cases/Issues  Rules of Professional Conduct/Advisory Opinions Board of Professional Conduct 1

Disciplinary Process 2

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Defending Disciplinary Cases  Cooperate, cooperate, cooperate  Refrain from blaming your former client  GET A LAWYER  Read rules and know what your penalty could be  Present evidence of mitigation [Gov. Bar Rule V Section 13] Sanctions  Public reprimand  One-year term suspension  Two-year term suspension  Indefinite suspension  Disbarment Interim Suspensions  Lawyers can be immediately suspended for being convicted of felonies in any jurisdiction, or failing to pay child support. Gov. Bar Rule V Section 18  Interim remedial suspensions can be imposed when attorney “has committed a violation ... and poses substantial threat of serious harm to the public. Gov. Bar Rule V Section 19 4

Defending Disciplinary Cases  Cooperate, cooperate, cooperate  Refrain from blaming your former client  GET A LAWYER  Read rules and know what your penalty could be  Present evidence of mitigation [Gov. Bar Rule V Section 13] Aggravation  Prior discipline  Dishonest or selfish motive  Pattern of misconduct  Multiple offenses  Lack of cooperation  Submission of false evidence  Refusal to acknowledge wrongful nature of conduct  Harm to clients/victims  Failure to make restitution Mitigation  Absence of prior discipline  Absence of dishonest or selfish motive  Timely, good faith effort to fix misconduct  Full and free disclosure  Character or reputation  Imposition of other penalties/sanctions  Qualified medical disorder with causation  Treatment/prognosis/rehab 5

Cases - Issues  Attorney client relationship  Who is client?  Dual representation in real estate transactions and title matters  Duty, duty, duty  Notary nightmares  Fraud/defalcation/theft  Conflicts Who do you Represent?  Can an attorney represent both sides in a real estate transaction? - Yes, if both sides give knowing consent in writing (RPC 1.6 & 1.7). - In Disciplinary Counsel v. Collins, 71 Ohio St. 3d 310 (1994) lawyer was publicly reprimanded for representing both sides and then potentially being a witness in a lawsuit involving property. Title Agent Representation  Can an attorney title agent represent one party in a sale and do the closing? - Attorney owns a title agency. You represent one of the parties in a sale transaction. Can your agency issue title insurance for the transaction? Continued 6

Title Agent Representation - OSBA Formal Opinion 37 (1989) interpreting old rules says “yes,” provided you take care of conflict issues – full disclosures, knowing waivers, etc. Duty, Duty, Duty & Title Searchers  What if you are engaged to do a title search by lender who was financing the purchase of the property for the buyer and you discover that an easement that provides access to the property terminates at a point in time but you do not disclose that fact to the buyer and sellers have no knowledge of the termination. Are you liable to the buyer? or is there a lack of privity under the Thomas v. Guarantee Title and Trust ? What is the duty? Continued Who Decides if There is an Attorney-Client Relationship?  In Davis v. Montgomery , 7 th District Court of Appeals held that summary judgment could not be granted for lawyer in a malpractice case as there was a question of fact as to whether the buyer believed that the lawyer was acting for him because he had used that lawyer for all of his real estate dealings in the past. 7

Duty, Duty, Duty: Advice to Buyer  Can attorney – closing agent give advice to the buyer? - You are closing a transaction. Buyers ask you for advice about whether they should back out of deal. - What should you do? Is there an attorney- client relationship if you give the buyer legal advice? Are you bound to be neutral? Cuyahoga County Bar Assn v. Hardiman  Contrary to respondent’s view, neither a formal contract nor payment of a retainer is necessary to trigger the creation of the attorney-client relationship. See, i.e., In re Disciplinary Action Against Giese (N.D.2003), 662 N.W.2d 250. Continued Cuyahoga County Bar Assn v. Hardiman  While it is true that attorney-client relationships may be formed by express terms of a contract, it “can also be formed by implication based on conduct of the lawyer and expectations of the client.” Guttenburg & Snyder, The Law of Professional Responsibility in Ohio (1992) 62, Section 3.1 Continued 8

Cuyahoga County Bar Assn v. Hardiman  Determination of whether an attorney-client relationship was created turns largely on reasonable belief of prospective client. See, i.e., Disciplinary Counsel v. Furth (2001), 93 Ohio St.3d 173, 184, 754 N.E.2d 219, where we found, inter alia, a violation of DR 6– 101(A)(3) based upon reasonable belief of “client” that respondent was representing him and his son in a legal matter. Deed Preparation / Attorney-Client Relationship  You are asked for a title agency to prepare deeds on a per deed basis. Your arrangement is that agency will email you title exam or commitment with name(s) of buyers. You will prep deed for a fee and send it back. You do not participate in execution of document(s) and are not otherwise involved in the deal. Continued Deed Preparation / Attorney-Client Relationship  In one particular deal, daughter and mother are in title in survivorship. Daughter wants to refinance but lender does not want mom on loan. You asked to prepare two deeds, one to take mom out of title and other to put her back in title after mortgage is filed.  You draft both deeds but do not include survivorship language in the 2 nd deed. Continued 9

Deed Preparation / Attorney-Client Relationship  Mom dies and daughter comes to you complaining that property should have passed to her and now there is an estate and she has to share with her siblings.  Is this an ethics violation or malpractice or neither? Continued Deed Preparation / Attorney-Client Relationship  In State ex rel Weiner v. Kopp, 1997 WL 346095, the 1 st District Court of Appeals held that where there is no privity between attorney and person, there is no attorney- client relationship. Continued Deed Preparation / Attorney-Client Relationship  In our example, there is no attorney client- relationship. But note, under RPC 4.3, if you have any communications with mom or daughter at the time deeds are drafted, you must advise them that you are not their counsel and advise them to get counsel if they so choose.  They must understand what your role is in preparing deeds. 10

Acknowledgments: Duty, Duty, Duty  You are an attorney title agent hired by lender to close a refinance. You are in a hurry at closing and notarize mortgage but forget to write in names of mortgagors in acknowledgment at closing and mistake is not caught before mortgage is filed. Mortgagors subsequently file for bankruptcy and mortgage is invalidated.  Have you violated ethics rules? Continued Getting Acknowledgments Wrong: There is a Duty  In Office of Disciplinary Counsel v. Roberts , 117 Ohio St. 3d 99 (2008), court said that failing to properly notarize documents can violate former rules 1-102(A)(4) which is now RPC 8.4(c) [a lawyer shall not engage in conduct that is prejudicial to justice].  This broad statement has generally been applied to situations where attorney notarizes documents when he has not seen it signed or in blank. Notarization: Rule #1  NEVER notarize something that you do not see person sign  YOU includes your STAFF Continued 11

Notarization Question  Man comes into your office and wants a deed notarized. He is not an existing client. He says he will sign it in your presence but his wife is at work and signed it already. He wants you to notarize it. You tell him that you can notarize his signature but his wife will have to come into the office and acknowledge that she signed the deed. He agrees and leaves. The next day he comes back, again without his wife. You are out but your secretary agrees to notarize the deed without his wife being present. Violation?  Have you violated the ethics rules? - RPC 5.3 says that you must make a reasonable effort to ensure that your assistant’s conduct is compatible with your professional obligations and that you are responsible for actions of your assistant if you order specific conduct, ratify conduct or fail to take steps to mitigate conduct. Duty & Law Related Services  Comment 3 to this rule emphasizes lawyer’s duty to instruct nonlawyer employees about ethical aspects of their job.  Rule 5.7 – “law related services” are subject to ethics rules as well. So if you own a title agency, which might be determined to be a “law related service,” you are bound by these rules. Continued 12