If a lawyer learns that his client (an estate administrator who is also a lawyer) diverted estate assets, may he disclose it to the court, heirs, or a successor attorney, and what must he do with the file when he withdraws?

Plain-English summary

Attorney A represented X as administrator of an estate in probate and discovered that X, who was also an attorney, had improperly diverted assets for his personal use. The corporate surety on X's bond was informed of the defalcation with X's consent, but X would not consent to any further disclosure and asserted that his communications to A were confidential. X agreed to substitute himself in pro per and was attempting to restore the assets. A asked whether, after being substituted out, he had to disclose the facts to the court, heirs, district attorney, or State Bar; whether he had to apprise a new attorney; how to answer if asked why he withdrew; and what to do with files containing false documents.

The committee weighed ABA Canon 37 (preservation of confidences) against Canon 29 (exposing dishonest conduct in the profession) and Canon 41 (rectifying fraud), along with California Business and Professions Code section 6068(e). It treated X's misappropriation as a past crime, not a continuing one, given that X was restoring the assets, so the self-contained crime exception did not apply. The committee concluded that Canon 29 is subject to Canon 37, and that A had to preserve the confidence even though X was also an officer of the court.

The committee answered that A may not disclose the defalcation to anyone, including the court or a new attorney, without X's consent; that if directly asked why he withdrew, A need not answer and could give "personal reasons," responding in a manner least likely to put others on inquiry; and that A should turn the file over to X or a successor attorney if X requested, but should retain any documents A had prepared that were based on false information.

Currency note

This opinion was issued in 1962, before California adopted the former Rules of Professional Conduct (effective 1989) and long before the current rules that follow the ABA Model Rules format (effective November 1, 2018). It interpreted ABA Canons 29, 37, and 41 and Business and Professions Code section 6068(e). California's confidentiality statute and the rules on withdrawal and client files have since been amended. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule mentioned here.

View original opinion

Common questions

Q: Could the lawyer report the client's diversion of estate assets to the court or the State Bar?

A: Per the opinion, no, not without the client's consent. The committee concluded that the duty to preserve the client's confidences (Canon 37) took priority over the duty to expose dishonest conduct (Canon 29).

Q: Did the lawyer have to tell a successor attorney about the misconduct?

A: Per the opinion, no. The committee concluded A could not inform the new lawyer of X's defalcation and was bound to preserve the confidence even if he learned the new lawyer was being imposed upon.

Q: What was the lawyer supposed to do with the file?

A: Per the opinion, turn the file over to the client or successor attorney on request, but retain any documents A had himself prepared that were based on false information.

Background and rules framework

The opinion predates the Model Rules and the numbered California rules. It interpreted ABA Canon of Professional Ethics 37 (confidences), Canon 29 (exposing dishonest conduct), and Canon 41 (rectifying fraud), together with California Business and Professions Code section 6068(e). Those authorities map to today's confidentiality rule (Model Rule 1.6; California Rule 1.6) and the rules governing declining or terminating representation and client files (Model Rule 1.16). The committee's central holding was that the confidentiality duty took priority over the duty to expose.

Citations and references

Rules of Professional Conduct (as in effect at the time):

• ABA Canons of Professional Ethics 29, 37, 41

Statutes:

• California Business and Professions Code section 6068(e)

Other opinions cited:

• ABA Committee Opinions 202, 248, 287; LACBA Opinion 253; New York County Opinions 190, 253

See also

• LACBA Ethics Op. 267: Guardian's Probable Misuse of a Ward's Funds
• LACBA Ethics Op. 466: Disclosure of Evidence of Crime Received From a Client
• LACBA Ethics Op. 386: Disclosure of Client Perjury
• LACBA Ethics Op. 475: Client Papers, Duty to Retain or Return

Source

• Landing page: https://lacba.org/?pg=ethics-opinions
• Original PDF: https://lacba.org/docDownload/2011010