May an attorney recommend title insurance to a client and then act as both title examiner and agent for the title insurance company in the same real estate or loan transaction?

Plain-English summary

This opinion expressly replaces and withdraws OBA Ethics Opinion No. 281, which had held that an attorney may not act as agent for a title insurance company in placing insurance on property purchased by the attorney's client. The committee recounted that, after Opinion 281, members of the Bar expressed disagreement and sought reconsideration, pointing out that Opinion 281 was contrary to ABA Formal Opinion No. 331 (1972). A Special Committee appointed by the Board of Governors recommended adopting the ABA position.

The committee adopted the holding of ABA Opinion No. 331, as summarized and modified in its syllabus. It concluded that under DR 5-101(A) and DR 5-104(A), so long as there is full disclosure to the client of both any compensation the lawyer will receive from the title insurance company and the fact that, in the event of a claim, the lawyer could be disqualified from representing both the client and the insurer, there is no prohibition against the lawyer both representing his client in a real estate transaction and acting as agent for a title insurance company in the same transaction. The syllabus frames the rule to cover recommending the purchase of title insurance and thereafter acting as both title examiner and agent for the insurer in a real estate or loan transaction.

The committee added a caveat from its Opinions 274 and 276: a lawyer engaged in a law-related occupation (which it held the sale of title insurance to be) must conform to the Code of Professional Responsibility in conducting that occupation, governing such matters as solicitation, advertising, and the reasonableness of compensation.

In practice

Under this opinion, an Oklahoma attorney may recommend title insurance and serve as both title examiner and the insurer's agent in the same client transaction, provided he makes full disclosure of the compensation he will receive and of the conflict-driven restriction on representing either side if a claim arises. Per the opinion, this conduct is governed by DR 5-101(A) and DR 5-104(A) and remains subject to the Code's rules on solicitation, advertising, and reasonable compensation as a law-related occupation. This opinion supersedes Opinion No. 281, which reached the opposite result.

Currency note

This opinion was issued in 1976 under the Code of Professional Responsibility, before Oklahoma adopted the Oklahoma Rules of Professional Conduct (1988) and the later Ethics 2000 revisions. The conflict-of-interest and business-transaction rules have since been recast (compare Model Rules 1.7 and 1.8). 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: Can an Oklahoma lawyer be both the title examiner and the title-insurance agent in a client's deal?

A: Yes, with full disclosure. The committee held that under DR 5-101(A) and DR 5-104(A) the lawyer may do both in the same transaction so long as he fully discloses the compensation he will receive and the restriction on representing either party if a claim arises.

Q: What happened to Opinion 281, which said the opposite?

A: This opinion expressly replaces and withdraws Opinion No. 281, adopting ABA Formal Opinion No. 331 in its place.

Q: Are there limits on the lawyer-agent's conduct?

A: Yes. The committee carried over the caveat of Opinions 274 and 276: because selling title insurance is a law-related occupation, the lawyer must conform to the Code in conducting it, including its rules on solicitation, advertising, and reasonable compensation.

Background and rules framework

The opinion applied DR 5-101(A) (declining employment where the lawyer's own interests may affect his judgment) and DR 5-104(A) (business transactions with a client where they have differing interests), adopting ABA Formal Opinion No. 331 (1972) and replacing OBA Opinion No. 281, with the law-related-occupation caveat of Opinions 274 and 276. It predates the Model Rules and made no Model Rule citation.

Citations and references

Rules of Professional Conduct:

• DR 5-101(A) (Code of Professional Responsibility): declining employment where the lawyer's own interests may affect his professional judgment, absent consent after full disclosure.
• DR 5-104(A) (Code of Professional Responsibility): business transactions with a client where they have differing interests.

Other opinions cited:

• ABA Formal Opinion No. 331 (1972); OBA Opinions No. 274 and 276.

Subsequent history:

• Replaces and withdraws OBA Legal Ethics Opinion No. 281.

See also

• Okla. Bar Ethics Op. 281: Attorney as a title-insurance agent (withdrawn)
• Okla. Bar Ethics Op. 274: Lawyer-accountant dual practice (overrules Op. 208)
• Okla. Bar Ethics Op. 276: Lawyer-CPA certificates, listings, and tax returns

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-290/

Original opinion text

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

Adopted October 29, 1976

THIS OPINION REPLACES LEGAL ETHICS OPINION NO. 281 WHICH IS HEREBY WITHDRAWN.

SYLLABUS

An attorney may recommend to his client the purchase of title insurance, and thereafter act as both title examiner and agent for the title insurance company in a real estate transaction or a loan transaction, so long as the attorney makes full disclosure to his client of the details of the transaction, including the financial remuneration to be received by the attorney from the title insurance company and the restrictions on his ability to represent either of the parties should a claim arise, and does not violate any of the disciplinary rules of the Canons of Professional Responsibility.

OBA Ethics Opinion No. 281, 45 Okla.Bar J. 2173 (9/28/74), revoked, insofar as it prohibits an attorney from acting as an agent for a title insurance company in a transaction involving his client.

OPINION

OBA Ethics Opinion No. 281, adopted by the Board of Governors at its meeting held on September 21, 1974, appearing at 45 Okla.Bar J. 2173 (9/28/74), held that an attorney may not act as an agent for a title insurance company in the placement of insurance covering the title to property purchased by the attorney’s client. Commencing immediately after the promulgation of this opinion and continuing until the present time, expressions of disagreement and requests for reconsideration were received from a number of members of the Bar. It was pointed out that such opinion was contrary to Formal Opinion No. 331 of the American Bar Association Standing Committee on Professional Ethics and Responsibility (ABA Committee) dated December 15, 1972.

The Board of Governors ultimately appointed a Special Committee to consider this matter, which Committee recommended that the position of the ABA Committee should be adopted in lieu of that expressed in OBA Opinion No. 281. Essentially, the Special Committee concluded that under DR 5-101(A) and 5-104(A), so long as there was full disclosure to the client both of any compensation to be received by the lawyer from the title insurance company, and that in the event of a claim, the lawyer could be disqualified from representation of both the client and the title insurance company, there should be no prohibition against the lawyer both representing his client in a real estate transaction and acting as agent for a title insurance company in connection with the same transaction.

Therefore, the holding of ABA Opinion No. 331, as summarized and modified in the syllabus set out at the inception of this Opinion, is hereby adopted, and OBA Opinion 281 revoked.

However, any lawyers acting as agents for title insurance companies should be aware of the caveat set out in OBA Opinions 274, 44 Okla.Bar J. 2157 (6/23/73), and 276, 45 Okla.Bar J. 560 (2/22/74), pointing out that a lawyer engaged in a law-related occupation (which we hold the sale of title insurance to be) must conform to the Code of Professional Responsibility in the conduct of such other occupation. This would govern such activities as solicitation, advertising, reasonableness of compensation and other matters.