Does a city attorney who prepares quitclaim deeds for tax-reverted property have to warn buyers that the title may not be insurable?

Plain-English summary

A city took quitclaim deeds from the State of Michigan for property the state had acquired through delinquent-tax proceedings, then resold the parcels at bid and conveyed them to purchasers by quitclaim deed. An assistant city attorney asked to prepare the deeds reported that title insurers would not insure such parcels as to marketable title, and that the lawyer personally doubted the state's acquisition procedures despite statutory savings language. The lawyer asked whether it was ethical to prepare the deeds and whether there was a duty to warn purchasers they might not receive good or insurable title.

The opinion concluded the lawyer's duty ran to the city client (MRPC 1.13(a)), and that under Friedman v Dozorc a lawyer owes no actionable duty to an adverse party. A quitclaim deed passes whatever interest the grantor has (MCLA 565.3; Lucking v Barker), and here the city was simply conveying whatever title it held by the same kind of deed by which it had acquired the property, so the client was not engaged in illegal or fraudulent conduct. The opinion found no violation of MRPC 8.4 (misconduct) or MRPC 4.1 (false statements to a third person), since the lawyer was not asked to make any false statement.

The opinion added one qualification under MRPC 4.3: because unrepresented purchasers might misunderstand the city attorney's role, mistakenly believing the attorney looked out for the public or not understanding the effect of a quitclaim deed, the city attorney should make reasonable efforts to correct any such misunderstanding. With that caveat, the opinion concluded the city attorney did not violate the rules by preparing the deeds and was not required to disclose personal doubts about insurability to a prospective purchaser.

Currency note

This opinion was issued in 1993, before later amendments to the Michigan Rules of Professional Conduct. MRPC 4.1, 4.3, and the related rules have since been amended, and subsequent rule changes or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Does a lawyer preparing deeds owe a duty to the other side of the deal?

A: The opinion concluded the lawyer's duty runs to the client (MRPC 1.13(a)), and that under Friedman v Dozorc a lawyer owes no actionable duty to an adverse party.

Q: Must the lawyer warn buyers that title might not be insurable?

A: No. The opinion concluded the lawyer is not ethically obligated to volunteer personal misgivings about title insurability to a prospective purchaser.

Q: Is it improper to prepare a quitclaim deed that conveys questionable title?

A: No. The opinion concluded that a quitclaim deed passes whatever interest the grantor has, the client was not engaged in illegal or fraudulent conduct, and preparing the deeds did not violate MRPC 8.4 or 4.1.

Q: Does the city attorney have any duty toward the unrepresented buyers at all?

A: Yes, a limited one. Under MRPC 4.3 the opinion concluded the city attorney should make reasonable efforts to correct any misunderstanding about the attorney's role.

Background and rules framework

The opinion applied Michigan's client-identity and third-party rules. MRPC 1.13(a) (Model Rule 1.13) identifies the organization (the city) as the client. MRPC 1.2(a) (Model Rule 1.2) frames pursuit of a client's lawful objectives. MRPC 4.1 (Model Rule 4.1) bars knowingly false statements of material fact to a third person; MRPC 4.3 (Model Rule 4.3) bars implying disinterestedness to an unrepresented person and requires correcting misunderstandings about the lawyer's role. MRPC 8.4 (Model Rule 8.4) defines professional misconduct. The opinion relied on Michigan property law (MCLA 565.3; Lucking v Barker) and on Friedman v Dozorc for the no-duty-to-adverse-party principle.

Citations and references

Rules of Professional Conduct:

• MR 1.2 / MRPC 1.2(a) (lawful objectives of a client)
• MR 1.13 / MRPC 1.13(a) (organization as client)
• MR 4.1 / MRPC 4.1 (truthfulness to third persons)
• MR 4.3 / MRPC 4.3 (dealing with unrepresented persons)
• MR 8.4 / MRPC 8.4 (misconduct)

Statutes:

• MCLA 565.3 (a quitclaim deed passes the grantor's interest)

Cases:

• Friedman v. Dozorc, 412 Mich 1; 312 NW2d 585 (1981), no actionable duty to an adverse party
• Lucking v. Barker, 274 Mich 103; 264 NW 306 (1936), effect of a quitclaim deed

See also

• Mich Ethics Op. RI-302: defense ex parte contact with a complaining witness
• Mich Ethics Op. R-2: contacting current and former corporate employees
• Mich Ethics Op. RI-112: prosecutor and county counsel as incompatible offices

Source

• Landing page: https://www.michbar.org/opinions/ethics/numbered_opinions?OpinionID=1027&Type=6

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

RI-157

March 8, 1993

SYLLABUS

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).

TEXT

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.