Can a lawyer who serves as a bankruptcy trustee contact a debtor who has a lawyer, without going through that lawyer?

Plain-English summary

The requesting attorney is in private practice but also serves as a panel bankruptcy trustee appointed by the United States Trustee's Office. In his trustee capacity, he wanted to contact debtors who are represented by counsel, sometimes without prior notice, to investigate on behalf of the estate. A bankruptcy trustee need not be a lawyer to serve. The lawyer asked whether such direct contact with a represented debtor violates Rule 4.2.

The committee explained that Rule 4.2 bars communication with a represented person "in representing a client," so the question turns on whether the attorney-trustee is acting as a lawyer for a client when he serves as trustee. A bankruptcy trustee is the representative of the estate, with capacity to sue and be sued, and is a party to the action standing in the estate's shoes. The committee reasoned that a trustee is not in an attorney-client relationship with the estate or himself unless he is also serving as legal counsel for the estate. It noted that parties may communicate with each other even when represented, so long as the communication is not the product of attorney misconduct, and that reading Rule 4.2 to bar an attorney-trustee's contact would give non-lawyer trustees broader investigative authority than lawyer-trustees.

The committee concluded that if the lawyer has a dual capacity (both trustee and legal counsel for the estate's representative), Rule 4.2 prohibits contacting the represented debtor without the debtor's counsel's consent. But if the lawyer acts solely as trustee and not as legal counsel, Rule 4.2 does not prohibit direct contact, provided the lawyer makes clear to everyone involved that he is not acting as legal counsel and that there is no attorney-client relationship.

In practice

This 2009 opinion applies North Dakota Rules of Professional Conduct 4.2 and 8.4. Under those rules, the committee held that Rule 4.2's no-contact rule applies only when a lawyer is representing a client, so a lawyer serving solely as a bankruptcy trustee, and not as legal counsel for the estate, may contact a represented debtor directly without violating Rule 4.2, as long as the lawyer makes the non-legal role clear to all involved. The committee held that where the lawyer also serves as legal counsel for the estate's representative, the dual capacity triggers Rule 4.2 and bars contact with the represented debtor absent that debtor's counsel's consent.

Common questions

Q: Does the no-contact rule apply to a lawyer who is acting as a bankruptcy trustee?

A: Not by itself. The committee said Rule 4.2 applies only when a lawyer is representing a client, and a trustee acts as a party representing the estate, not as a lawyer, so a lawyer acting solely as trustee may contact a represented debtor directly.

Q: What must the attorney-trustee do to stay within the rule?

A: The committee said the lawyer must make clear to all parties and involved persons that he serves only as a trustee, not as legal counsel for the estate, and that there is no attorney-client relationship.

Q: When is the contact prohibited?

A: When the lawyer has a dual capacity, serving both as trustee and as legal counsel for the estate's representative. In that situation, the committee said Rule 4.2 bars contacting the represented debtor without the debtor's counsel's consent.

Background and rules framework

The opinion interprets North Dakota Rule of Professional Conduct 4.2 (Model Rule 4.2, communication with a person represented by counsel) and references Rule 8.4 (misconduct, including acting through another). The analysis rests on the rule's "in representing a client" trigger and on bankruptcy law (11 U.S.C. 323, 704) establishing that a trustee is the estate's representative and a party, not necessarily a lawyer.

The opinion is issued under North Dakota Rule for Lawyer Discipline 1.2(B), the safe-harbor provision protecting good-faith reliance on a written ethics-committee opinion.

Citations and references

Rules of Professional Conduct:

• Model Rule 4.2 / N.D.R. Prof. Conduct 4.2 (communication with a represented person)
• Model Rule 8.4 / N.D.R. Prof. Conduct 8.4 (misconduct; acting through another)
• N.D.R. Lawyer Discipline 1.2(B) (safe harbor for reliance on a committee opinion)

Statutes:

• 11 U.S.C. 323 (trustee as representative of the estate; capacity to sue and be sued)
• 11 U.S.C. 704 (trustee's duties, including investigating the debtor's affairs)

Cases:

• Commodity Futures Trading Commission v. Weintraub, 471 U.S. 343 (1985) (powers and duties of a bankruptcy trustee)
• In re Markos Gurnee Partnership, 182 B.R. 211 (N.D. Ill. 1995) (trustee as the proper party representing the estate)

Other opinions cited:

• Arizona Ethics Op. 03-02 (same result for attorney-trustees)
• SBAND Opinion 96-10 (parties may communicate directly absent attorney misconduct)

See also

• CA Op. 1989-110: Lawyer-Trustee Contacting Represented Parties
• ABA Formal Op. 95-396: The No-Contact Rule (4.2)
• ABA Formal Op. 07-445: Contacting Putative Class Members

Source

• Landing page: https://www.sband.org/page/ethics_opinions
• Original PDF: https://cdn.ymaws.com/www.sband.org/resource/resmgr/docs/for_lawyers/opinion_09-04.pdf

Original opinion text

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

STATE BAR ASSOCIATION OF NORTH DAKOTA
ETHICS COMMITTEE
Opinion No. 09-04
July 16, 2009

The Committee received, by letter dated April 20, 2009, a request to determine whether the
North Dakota Rules of Professional Conduct prevent Requesting Attorney (“RA”) from
contacting a represented Bankruptcy Debtor (“Debtor”) under the following circumstances.

FACTS

RA is an attorney in private practice. However, RA also acts as a panel bankruptcy trustee
appointed by the United States Trustee’s Office in the State of North Dakota. RA is currently an
interim bankruptcy trustee as defined by 11 U.S.C. §701. If elected by the creditors or the
creditors fail to elect a trustee, a panel trustee may serve as the bankruptcy trustee in the case. 11
U.S.C. §702. A bankruptcy trustee need not be an attorney to be eligible to serve as a trustee. 11
U.S.C. §§321, 322.

RA, in his capacity as bankruptcy trustee, asks whether RA may make direct contact with a
Debtor who is represented by counsel. The purpose of RA initiating contact with the Debtor is to
make his investigation on behalf of the estate. See generally 11 U.S.C. §704. RA wishes to do
this occasionally without prior notice.

The powers and duties of a bankruptcy trustee are extensive. Upon the
commencement of a case in bankruptcy, all corporate property passes to an estate
represented by the trustee. 11 U.S.C. §§ 323, 541. The trustee is “accountable for
all property received,” §§ 704(2), 1106(a)(1), and has the duty to maximize the
value of the estate, see § 704(1); In re Washington Group, Inc., 476 F.Supp. 246,
250 (MDNC 1979), aff'd sub nom. Johnston v. Gilbert, 636 F.2d 1213 (CA4
1980), cert. denied, 452 U.S. 940, 101 S.Ct. 3084, 69 L.Ed.2d 954 (1981). He is
directed to investigate the debtor's financial affairs, §§ 704(4), 1106(a)(3), and is
empowered to sue officers, directors, and other insiders to recover, on behalf of
the estate, fraudulent or preferential transfers of the debtor's property, §§
547(b)(4)(B), 548. Subject to court approval, he may use, sell, or lease property of
the estate. § 363(b).

Commodity Futures Trading Commission v. Weintraub, 471 U.S. 343, 352 (1985).

Specifically, RA asks whether his direct contact, without prior notice, with a Debtor who is
represented by counsel violates North Dakota Rule of Professional Conduct 4.2 (“Rule 4.2”).
The request presumes that the RA has not sought the agreement for the contact from the Debtor’s
counsel.

DISCUSSION

The question presented is whether RA, an attorney-trustee, may have communication with
parties to the bankruptcy action who are represented by counsel. The question turns on whether
in the course of acting as bankruptcy trustee, the RA is representing a client.

A. Rule 4.2.

The relevant rule of Professional Conduct is Rule 4.2: Communication with Person Represented
by Counsel. Rule 4.2 states as follows:

In representing a client, a lawyer shall not communicate about the subject of the
representation with a person the lawyer knows to be represented by another
lawyer in the matter, unless the lawyer has the consent of the other lawyer or is
authorized to do so by law or a court order.

(emphasis added).

Rule 4.2 prohibits communication with represented persons about the subject of the
representation when the attorney is representing a client. The bankruptcy trustee is the
representative of the bankruptcy estate. 11 U.S.C. §323(a). The bankruptcy trustee has the
capacity to sue and be sued. Id.(b). Rule 4.2 would apply and prohibit the communication
outside of the presence of the Debtor’s counsel if the RA acting as a bankruptcy trustee has an
attorney-client relationship with a party to the bankruptcy action.

Because the bankruptcy trustee can sue and be sued and the trustee stands in the shoes of the
bankruptcy estate, the bankruptcy trustee is a party to the action. In re Markos Gurnee
Partnership, 182 B.R. 211 (N. D. Ill. 1995).

In bankruptcy, it was never doubted that the trustee, rather than the debtor's estate,
was the proper party in litigation involving the estate. However, there developed a
second principle, at variance with the usual common law rule, that in such
litigation, the bankruptcy estate, as a separate entity, was the real party in interest,
with the trustee serving merely as a representative.

Id.
Thus, the bankruptcy trustee would not be in an attorney-client relationship with the estate or
himself as trustee unless the RA was also acting as legal counsel or attorney for the
estate/trustee. See Arizona Ethics Opinion 03-02 (reaching the same result).
This result is consistent with the underlying principle behind Rule 4.2.

This Rule contributes to the proper functioning of the legal system by protecting a

person who has chosen to be represented by a lawyer in a matter against possible
overreaching by other lawyers who are participating in the matter, interference by

those lawyers with the lawyer-client relationship, and the uncounseled disclosure
of information relating to the representation.

Rule 4.2, comment I.

The RA, however, must make it clear to all parties and other involved persons that he
represents the estate only as a panel or appointed trustee and not as legal counsel for the
bankruptcy estate. If RA makes his role clear and is careful to so limit his role, RA
would not be interfering with the Debtor’s, or other parties’, attorney-client relationship.
To reach a different result would give non-attorney trustees broader authority to protect
the bankruptcy estate than attorney trustees. It is a well established principle that parties
may communicate with each other even if they are represented as long as the
communication is not the result of attorney misconduct. N.D. Ethics Op. 96-10; see also
N.D. Rule of Professional Conduct 8.4 (misconduct for the attorney to act through
another to do what would otherwise be misconduct).

CONCLUSION

In conclusion, if the RA has or will have a dual capacity (1) as representative of the
estate, and (2) as legal counsel for the representative of the estate, communication with a
represented Debtor is prohibited under Rule 4.2. However, if the RA is not representing
the bankruptcy estate as legal counsel, and is acting solely as trustee for the bankruptcy
estate, Rule 4.2 does not prohibit direct contact with the represented Debtor as long as
RA makes it clear to all persons involved in the action that RA is not representing the
bankruptcy estate or the trustee as legal counsel and that there is no attorney-client
relationship.

This Opinion is provided pursuant to Rule 1.2(B) of the North Dakota Rules for Lawyer
Discipline. This rule provides:

A lawyer who acts with good faith and reasonable reliance on a written opinion or
advisory letter of the ethics committee of the association is not subject to sanction
for violation of the North Dakota Rules of Professional Conduct as to the conduct
that is the subject of the opinion or advisory letter.

This Opinion was drafted by Adele Page and unanimously approved by the Committee
on July 16, 2009.

Dann Greenwood, Chair