I represent a title insurer, and I also prosecute actions in a bank's name to clear title defects even while defending against that bank's claims. Whose consent do I need?

Plain-English summary

The inquiring attorney asked about representing a real estate title insurance company in defending against the claims of banks or mortgage issuers while simultaneously prosecuting actions, in the name of the banks, to remove a title or mortgage defect. The attorney sought the panel's confirmation that the attorney's client in such proceedings, where the bank's name is merely contractually invoked for purposes of prosecuting the action, is actually the insurance company and not the bank.

The panel took the position that Rhode Island Rule of Professional Conduct 1.7 (Conflict of Interest: General Rule) governs. Rule 1.7 bars representing a client where the representation will be directly adverse to another client, or may be materially limited by responsibilities to another client or third person, unless the lawyer reasonably believes the representation will not be adversely affected and each client consents after consultation.

The panel took the position that the attorney should obtain the informed consent of the bank to render the representation of the title insurance company proper under Rule 1.7. Although the bank's name had merely been invoked contractually for purposes of instituting the action, in which the insurance company is the actual client, the panel concluded that the bank's consent should be obtained for the attorney's full protection.

Currency note

This opinion was issued in 1991, after the Rhode Island Supreme Court adopted the Model Rules of Professional Conduct effective November 15, 1988, and it applies Rule 1.7 as originally adopted. The Rhode Island Supreme Court later revised the Rules of Professional Conduct in 2007 as part of the nationwide Ethics 2000 process, which renumbered and amended several provisions, including Rule 1.7. Subsequent rule amendments 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 Treat this page as historical context, not current guidance.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 mentioned here.

Common questions

Q: If I bring a subrogation-type action in the bank's name for a title insurer, who is my client?

A: Per the opinion, the actual client is the insurance company; the panel accepted that the bank's name is merely contractually invoked to prosecute the action.

Q: Do I still need the bank's consent?

A: Under this opinion, yes. The panel concluded the attorney should obtain the bank's informed consent under Rule 1.7 for the attorney's full protection, notwithstanding that the insurance company is the actual client.

Q: What rule governs this arrangement?

A: The panel applied Rule 1.7 (Conflict of Interest: General Rule), which addresses representation directly adverse to another client or materially limited by responsibilities to another client, absent consent after consultation.

Background and rules framework

The opinion applies Rule 1.7 (Conflict of Interest: General Rule), corresponding to Model Rule 1.7. The rule bars representation directly adverse to another client, or that may be materially limited by the lawyer's responsibilities to another client or third person, unless the lawyer reasonably believes the representation will not be adversely affected and each affected client consents after consultation. The panel treated the bank as a client whose consent should be secured even though the insurance company was the actual client in interest.

Citations and references

Rules of Professional Conduct:

• MR 1.7 (conflict of interest: current clients)
• RI RPC 1.7

Statutes:

• None cited.

Cases:

• None cited.

Other opinions cited:

• None cited.

See also

• RI EAP Op. 91-36: Deposing Counsel and a Former Joint Client Conflict
• RI EAP Op. 91-31: Lawyer as Witness in a Real Estate Dispute

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2091-40.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

Digest of Ethics Advisory Panel
Opinion #91-40, Request #159
Issued July 18, 1991

An attorney seeks Panel advice concerning the ethical propriety of representing a real estate title insurance company in defending against the claims of banks or issuers of mortgages while simultaneously prosecuting actions, in the name of the banks, to remove the title or mortgage defect. The attorney seeks Panel confirmation that the attorney's client in such proceedings, where the name of the bank is merely contractually invoked for the purpose of prosecuting the action, is actually the insurance company and not the bank.

The Panel takes the position that Rhode Island Rule of Professional Conduct 1.7 governs this factual situation. Rule 1.7 provides:

Rule 1.7 Conflict of Interest: General Rule

(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless

(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and

(2) each client consents after consultation.

(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless:

(1) the lawyer reasonably believes the representation will not be adversely affected, and

(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.

The Panel takes the position that the attorney should obtain the informed consent of the bank in order to render the representation of the title insurance company proper under Rule 1.7. The Panel is of the opinion that although the bank's name has merely been invoked contractually for purposes of instituting the action, in which the insurance company is the actual client, the bank's consent should be obtained for the attorney's full protection.