Can a lawyer turn a client's bounced check for fees over to the district attorney, and warn the client by letter that the check will be prosecuted unless it is paid?

Plain-English summary

An attorney received many dishonored ("hot") checks from clients paying for completed legal services, often because of insufficient funds or a closed account. The local district attorney would not accept a hot check for prosecution unless the holder had first sent a certified letter warning that the check would be turned over for prosecution if unpaid. The Committee was asked whether the attorney could refer such a check to the district attorney, and whether the attorney could send the warning letter.

On the first question, the Committee concluded there is nothing unethical in turning the check over to the district attorney for prosecution, because the services were complete and a lawyer should not be barred from doing what a non-lawyer could do. While DR 4-101 requires protecting client confidences and secrets (with an exception under subsection (C)(4) permitting disclosure to establish or collect a fee), merely referring the check is not collecting the fee. The Committee reasoned that DR 4-101 protects a client against disclosure of crimes confided to the attorney, but does not prevent the attorney from reporting a crime of which the attorney is the victim; a client who issues a hot check without telling the attorney has not confided anything. The Committee cautioned that the attorney must word any letter carefully so it does not appear to threaten prosecution unless the check is paid.

On the second question, which the Committee called more difficult, a letter indicating that the purpose of prosecution is to obtain payment would be improper under DR 7-105, which bars threatening to present criminal charges solely to obtain an advantage in a civil matter. But the Committee concluded the warning here served other purposes (it was required by the district attorney and gave the recipient a chance to avoid a complaint by paying), and that the mere threat of filing a charge does not by itself violate the Code, citing R. Peter Decato's Case, 379 A.2d 825 (N.H. 1977). The Committee concluded that referring the check is not unethical unless done solely to gain an advantage in a civil matter, and that an informative (rather than demanding or threatening) letter, explaining the district attorney's requirements and the chance to pay, would not be unethical.

Currency note

This opinion was issued in 1988, under the former Texas Code of Professional Responsibility, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. The Disciplinary Rules have since been amended, including the comprehensive 2021 revisions adopted by Texas Supreme Court order, and Texas never adopted the ABA's Ethics 2000 framework. The current Texas rule on threatening criminal or disciplinary charges to gain a civil advantage is Rule 4.04(b). 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: Can a lawyer report a client's bounced fee check to the district attorney?

A: The Committee concluded yes. Because the lawyer is the victim of the crime and the services were complete, DR 4-101 does not bar the referral; a client who issues a hot check without telling the lawyer has not confided anything.

Q: Can the lawyer send a letter warning that the check will be prosecuted unless paid?

A: Per the opinion, only if it is informative rather than a threat. A letter whose purpose is to obtain payment would violate DR 7-105, but an informative letter explaining the district attorney's requirements and the chance to pay is permissible.

Q: Does referring the check count as collecting a fee in violation of confidentiality?

A: The Committee concluded no. Although DR 4-101(C)(4) permits disclosure to establish or collect a fee, merely turning the check over to the district attorney is not an attempt to collect the fee.

Background and rules framework

The opinion interprets DR 4-101 of the former Texas Code of Professional Responsibility (confidences and secrets, including the (C)(4) fee-establishment exception; analogous to ABA Model Rule 1.6) and DR 7-105 (no threatening to present criminal charges solely to obtain an advantage in a civil matter). The ABA Model Rules contain no direct successor to DR 7-105; the modern Texas counterpart is Rule 4.04(b). The analysis turns on the lawyer's status as the crime victim and on whether the warning letter's sole purpose is to gain a civil advantage.

Citations and references

Rules of Professional Conduct:

• MR 1.6 (confidentiality of information; analog to DR 4-101)
• DR 4-101, Texas Code of Professional Responsibility (confidences and secrets; (C)(4) fee exception)
• DR 7-105, Texas Code of Professional Responsibility (no threatening criminal charges to gain civil advantage)

Statutes:

• Tex. Penal Code art. 32.41 (issuance of a bad check), referenced in the opinion

Cases:

• R. Peter Decato's Case, 379 A.2d 825 (N.H. 1977), mere mention of a possible criminal charge is not, by itself, made solely to gain a civil advantage

Other opinions cited:

• Texas Ethics Opinion 353 (July 1970); ABA Ethics Opinions 84-94 and 81-493 (collections, confidentiality, and non-payment of fees)

See also

• TX Ethics Op. 455: Assisting in Criminal Prosecution of a Defendant in a Pending Civil Suit
• TX Ethics Op. 464: Selling Delinquent Accounts Receivable to a Factoring Company
• TX Ethics Op. 495: Disclosing Confidential Client Information to a Collection Agency

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-457/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_457.pdf

Original opinion text

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

QUESTION PRESENTED

Is it ethical in such circumstances for the attorney to turn the hot check over to the District Attorney's Office for criminal prosecution?
In the fact situation presented above, is it ethical for the attorney to warn the prospective defendant by letter that unless the check is paid, it will be turned over to the District Attorney's Office for prosecution?

STATEMENT OF FACTS

An attorney receives a substantial number of hot checks from clients in payment for services rendered. In the usual fact situation, the client gives the firm a personal check in payment for representation in a court action or for preparation of the legal documents. Often the check fails to clear the bank either due to insufficient funds, or because of a closed bank account after the services have been concluded. As a result, efforts to collect the check invariably prove futile.

The District Attorney's Office in the county where the lawyer is practicing will not accept hot checks for prosecution unless efforts have been made to collect on the check pursuant to a certified letter which contains the warning that unless the check is paid, the holder of the check will turn it over to the District Attorney's Office for protection.

DISCUSSION OF QUESTION NO. 1
There is nothing unethical in the attorney turning the hot check over to the District Attorney's Office for criminal prosecution by that office because the services have been completed. He should not be precluded from doing something that a non-lawyer could do under the same circumstances. Although Disciplinary Rule 4-101 requires that attorneys protect the secrets and confidences of their clients, Subsection C.4 of the Rule permits the attorney to divulge secrets or confidences when necessary to establish or collect a fee. Merely turning the check over to the local District Attorney's Office for prosecution does not constitute an attempt to collect the fee. It might be construed as reporting the commission of a crime and DR 4-101 does seem to protect the client against disclosures by the attorney of crimes reported to the attorney in confidence. See Texas Bar Committee Opinion 353 (July, 1970). However, it is not thought that Rule 4-101 would prevent the attorney from reporting a crime committed by the client when the attorney is the victim of the crime. If the client issues a hot check without advising his attorney of this fact, then certainly the client has not confided in his attorney.

The attorney, however, must be exceptionally careful in the letter which he writes to the client that the language required by the District Attorney's Office of the county is not used in such a way as to make it appear that the attorney is threatening to turn the case over to the District Attorney's Office for prosecution unless it is paid in advance. This could best be accomplished by a simple statement in the letter which outlines the requirements of the District Attorney's Office before they will accept a hot check complaint, as well as the provisions of Art. 32.41 T.P.C.

DISCUSSION OF QUESTION NO. 2
The answer to Question No. 2, is more difficult. If the letter indicates that the purpose of the prosecution is to obtain the payment of the check, this would be improper, and in violation of Disciplinary Rule 7-105, which prohibits an attorney from threatening to present criminal charges solely to obtain an advantage in a civil matter. However, the warning in question has purposes other than merely attempting to gain an advantage in a civil dispute. In the first place, it is required by the District Attorney's Office before they will accept the complaint, and, in addition, it gives the individual an opportunity to avoid the filing of a complaint by paying the check. The mere threat of filing a criminal charge against a debtor does not violate the provisions of the Code of Professional Responsibility. See R. Peter Decato's Case, 379 Atl.2d 825, an opinion of the Supreme Court of New Hampshire delivered October 31, 1977. In that case disciplinary proceedings were instituted against an attorney and a reprimand issued by the Professional Conduct Committee as a result of a letter the attorney wrote to a doctor, the third paragraph of which read: In New Hampshire it is a crime to obtain services by means of deception in order to avoid the due payment therefor. Without any proof on your part, you have chosen to stop payment on a check after it was made for the payment of services. Unless you communicate directly with me and give me some proof that the damages sustained to your son's International Harvester were a result of the failure of Decato Motor Sales, Inc., I shall consider filing a criminal complaint with the Lebanon District Court against your son for theft of services."

On appeal, the Supreme Court, quoting DR 7-105(A) which states that a lawyer "shall not present, participate in presenting or threaten to present criminal charges solely to obtain an advantage in a civil matter," said: "An element of the offense is that there is proof that the person charged acted with the purpose solely to obtain an advantage in a civil matter. Absent this proof, a lawyer may not lawfully be found in violation of DR 7- 105(A)."

The Court found that none of the evidence suggested that the letter from Mr. Decato to Dr. Goldstrum was sent solely to obtain an advantage in a civil matter, saying: "The language in issue relates to informing Dr. Goldstrum that it is a crime to obtain services by means of deception in order to avoid due payment. The mere mention of possible filing of criminal charge does not in itself suggest that the statement was made in an effort to gain leverage in a collection suit." "At no time did Mr. Decato demand or request payment, and therefore this Court cannot find by clear and convincing evidence that his sole purpose was to "obtain an advantage in a civil suit."

DR 7-105 of the Rules of the State Bar of Texas is in words and phrases identical to DR 7-105(A) of the ABA Rules.

The ABA Model Code of Professional Responsibility, in its ethical considerations, have given us some insight into this problem. EC 2-23 says that: "A lawyer should be zealous in his efforts to avoid controversies over fees with clients and should attempt to resolve amicably any differences on the subject. He should not sue a client for a fee unless necessary to prevent fraud or gross imposition by the client." ABA EC 2-23 (6/4/84).

"An attorney who has not received payment for his services may sue the client to recover reasonable attorney's fees only after he has zealously attempted to avoid a controversy and sought to amicably resolve any differences with the client." ABA Ethics Opinion 84-94. Also, Opinion 81-493, Collections; Confidentiality; and Non-Payment of Fees. A lawyer instituting legal proceedings to collect a delinquent fee may disclose client confidences and secrets gained during the representation which are necessary to establish and collect his fee. The Code requirements regarding confidentiality do not prohibit such practice. Opinion 294; DR 4-101(C)(3); EC 2-23; ABA EC 2-23 (undated).

The attorney should end the letter with a statement similar to the following: "This letter is not meant to give you legal advice. You should seek legal advice in this matter from an attorney of your own choice."

CONCLUSION

In answer to the questions above presented, it is apparent that the turning over by the attorney of the hot check to the District Attorney's Office for criminal prosecution does not constitute unethical conduct unless it is done solely for the purpose of obtaining an advantage in a civil matter. Caution would have to be exercised by the attorney, in the way in which he worded his letter to the prospective defendant in compliance with the requirements of the District Attorney's Office. If the letter to the client who had issued the hot check was informative only, as opposed to demanding and threatening, and only advised that it was being turned over to the District Attorney's Office for prosecution and advised of the fact that the District Attorney's rules required notice to the prospective defendant in order that he could pay the same if he desired to do so, and thereby avoid prosecution, the action once again would not be considered unethical.

Tex. Comm. On Professional Ethics, Op. 457 (1988)