A matrimonial lawyer certified a client's financial statement to family court and later learns it omitted substantial assets through the client's fraud. Must the lawyer withdraw the statement?

Plain-English summary

A matrimonial lawyer certified the accuracy of a client's financial statement and filed it with family court. The lawyer later learned the statement contained a material error: it omitted substantial client assets. The committee was asked whether the lawyer must withdraw the financial statement.

The analysis runs through DR 7-102(B)(1), which requires a lawyer who receives information "clearly establishing" that the client has perpetrated a fraud on a person or tribunal in the course of the representation to call on the client to rectify it, and if the client refuses or cannot, to reveal the fraud to the affected person or tribunal, except where the information is protected as a confidence or secret. The lawyer must first decide whether the information clearly establishes fraud, which under the Code's definition requires scienter, deceit, intent to mislead, or a knowing failure to correct misrepresentations; if the lawyer is uncertain about the client's state of mind, EC 7-6 directs resolving reasonable doubts in favor of the client.

If fraud is clearly established and the client refuses to rectify, the committee applies the interplay it set out in N.Y. State 674: the "confidences and secrets" exception in DR 7-102(B) means those protected by DR 4-101, and where a lawyer is permitted to reveal a confidence under DR 4-101(C), disclosure of the fraud becomes mandatory under DR 7-102(B). Here, DR 4-101(C)(5) permits disclosure to the extent implicit in withdrawing a representation previously given and still relied upon, where the lawyer discovers it was based on materially inaccurate information. Because the lawyer certified the statement and the court is still relying on it, permissive disclosure under DR 4-101(C)(5) makes disclosure mandatory under DR 7-102(B)(1). The lawyer must therefore withdraw the financial statement and reveal confidences or secrets to the extent implicit in that withdrawal. The committee distinguishes Nassau County 2003-1, where the lawyer had not submitted or certified the fraudulent statement, so the misrepresentation stayed protected.

Separately on withdrawal from the representation, the committee notes the lawyer may withdraw under DR 2-110(C) (for example, where the client used the lawyer's services to perpetrate a fraud) and must withdraw under DR 2-110(B)(2) if the lawyer knows or it is obvious that continued employment will violate a Disciplinary Rule, with the court's permission if required.

In practice

Under the New York Code as it stood at the time, the opinion holds that a lawyer who has certified a court filing cannot stay silent once the lawyer clearly learns the filing was fraudulent. The duty is staged: first determine whether the information clearly establishes fraud (resolving genuine doubt about the client's intent in the client's favor under EC 7-6); then demand correction; then, if the client refuses, withdraw the statement and disclose only what is implicit in withdrawing it. The committee's key move is treating the lawyer's own certification as what triggers DR 4-101(C)(5), converting permissive disclosure into mandatory disclosure under DR 7-102(B)(1). It distinguishes situations where the lawyer played no role in submitting the false statement, in which the information remains a protected secret.

Common questions

Q: Does the lawyer have to do anything before disclosing?

A: Yes. Under DR 7-102(B)(1) the lawyer must first call on the client to rectify the fraud; the disclosure duty arises only if the client refuses or is unable to correct it.

Q: What counts as "fraud" the lawyer must act on?

A: Information clearly establishing fraud as the Code defines it, which requires scienter, deceit, intent to mislead, or a knowing failure to correct. If the lawyer is uncertain about the client's state of mind, EC 7-6 says to resolve reasonable doubts in the client's favor.

Q: Doesn't confidentiality protect the omitted assets?

A: Not here. The committee holds that because the lawyer certified the statement the court still relies on, DR 4-101(C)(5) permits disclosure implicit in withdrawing it, and permissive disclosure under DR 4-101(C) makes disclosure mandatory under DR 7-102(B)(1).

Q: How much can the lawyer reveal?

A: Only what is implicit in withdrawing the financial statement. The committee limits disclosure to that scope rather than a full account of the client's conduct.

Q: Must the lawyer also stop representing the client?

A: The lawyer may withdraw under DR 2-110(C) and must withdraw under DR 2-110(B)(2) if the lawyer knows or it is obvious that continued employment will result in violating a Disciplinary Rule, with the court's permission where required.

Background and rules framework

The opinion applies New York's former Code of Professional Responsibility. DR 7-102(B)(1) sets the rectify-then-reveal duty for client fraud on a tribunal (the subject now treated by Model Rule 3.3). DR 4-101 governs confidences and secrets and the DR 4-101(C)(5) exception for disclosure implicit in withdrawing a prior representation (the confidentiality framework of Model Rule 1.6). DR 2-110 governs permissive and mandatory withdrawal (analogous to Model Rule 1.16). DR 1-102 addresses misconduct generally (analogous to Model Rule 8.4). The committee's reasoning ties the lawyer's certification of the filing to the trigger that converts permissive disclosure into a mandatory one.

Citations and references

Rules of Professional Conduct:

• MR 3.3 (candor toward the tribunal; client fraud); NY DR 7-102(B)(1)
• MR 1.6 (confidentiality; disclosure implicit in withdrawing a representation); NY DR 4-101, DR 4-101(C)(5)
• MR 1.16 (mandatory and permissive withdrawal); NY DR 2-110
• MR 8.4 (misconduct); NY DR 1-102

Statutes and rules:

• 22 NYCRR 202.16(e) and 130-1.1A: certification of matrimonial filings

Cases:

• Attorney Grievance Commission v. Rohrback, 323 Md. 79 (1991), what constitutes client fraud and a lawyer's assistance in it

Other opinions cited:

• N.Y. State 674 (1995): the "confidences and secrets" in DR 7-102(B) are those protected by DR 4-101; permitted disclosure becomes mandatory
• Nassau County 2003-1: distinguished; the lawyer had not submitted or certified the fraudulent statement, so it stayed protected
• N.Y. City 2002-1 and N.Y. City 1994-8: limits of the crime exception and protection of client fraud as a secret

See also

• NY State Bar Op. 797: Correcting a client's false affidavit
• NY State Bar Op. 1123: False statement of net worth and remedial measures
• NY State Bar Op. 831: Disclosing client fraud on a tribunal before April 2009
• NY State Bar Op. 982: Disclosing potential fraud on a tribunal

Source

• Landing page: https://nysba.org/ethics-opinion-781/