Can a lawyer stay silent about an opposing party's insufficient redemption tender to let the redemption period expire?

Currency note

This opinion was issued in 1967, before the State Bar of California's adoption of the November 1, 2018 revisions to the Rules of Professional Conduct. The opinion rests on former California Rule 1 (commending the ABA Canons) and former ABA Canons 15, 22, and 29; the duty of truthfulness toward others is today addressed by current Rule 4.1 and Model Rule 4.1. The opinion also notes an intervening statutory change in the notice required for such sales. Subsequent rule amendments and statutes may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the State Bar of California's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.

About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. The opinion text is reproduced at the bottom; the official source (linked) controls.

View original opinion

Plain-English summary

A lawyer represented a carpenter who won a mechanic's lien judgment, then held a sheriff's sale of the debtor's home at which the client bid in the property for the amount of the judgment. Under the law and facts at the time, no actual notice of the sale was required, and neither the defendant nor the defendant's counsel knew of it. The defendant later had a year to redeem. Defendant's counsel mailed the plaintiff's attorney a check for the amount of the judgment, tendered in full satisfaction, but it was legally insufficient to redeem because it omitted the expenses of the sheriff's sale, of which the defense was still unaware. The committee was asked whether the plaintiff's attorney could simply leave the letter unanswered and the check unnegotiated, hoping the redemption period would lapse.

The committee concluded the attorney would not have been justified in keeping silent. It acknowledged that, ordinarily, a lawyer has no affirmative duty to warn opposing counsel about an approaching deadline or a neglected step. But it reasoned that, as in the law of fraud, circumstances can make silence itself deceptive, and three elements in combination created an obligation to disclose the facts of the sale or at least return the check to put opposing counsel on inquiry: receipt of a check normally calls for acceptance or rejection, and total inaction intended as rejection is misleading; the plaintiff's attorney knew of the sale and knew opposing counsel was ignorant of it, so silence would have an intentionally deceptive effect; and a failure to disclose would have produced a grossly unconscionable result, forfeiting the defendant's home and unjustly enriching the plaintiff beyond his bill and expenses.

Common questions

Q: Does a lawyer have a general duty to warn opposing counsel about a missed deadline?

A: No. The committee said there is ordinarily no affirmative duty to warn another lawyer who may be about to let a time limit expire or neglect a step important to the client's rights.

Q: Why was silence improper here despite that?

A: Because three elements combined: a received check normally calls for a response, so inaction was misleading; the attorney knew opposing counsel was ignorant of the sheriff's sale, making silence intentionally deceptive; and the result would have been a grossly unconscionable forfeiture and unjust enrichment.

Q: What was the lawyer required to do?

A: The committee said the attorney had to disclose the facts about the sale, or at least return the check so as to put opposing counsel on inquiry.

Background and rules framework

The opinion interprets former California Rule of Professional Conduct 1, which commended the ABA Canons to California lawyers, and applies former ABA Canons 15 (advancing client interests within the bounds of law and conscience), 22 (candor and fairness with other lawyers), and 29 (upholding the honor of the profession). The duty of truthfulness in statements to others, including when silence is deceptive, is now embodied in California Rule 4.1 and Model Rule 4.1.

Citations and references

Rules of Professional Conduct:

• Former California Rule 1 (commending the ABA Canons); former ABA Canons 15, 22, and 29
• Current analog: Model Rule 4.1 / California Rule 4.1 (truthfulness in statements to others)

See also

• CA Ethics Op. 2013-189: Deceit in Contract Drafting
• CA Ethics Op. 2015-194: Puffing in Negotiations

Source

• Landing page: https://www.calbar.ca.gov/legal-professionals/ethics-compliance-practice-resources/ethics/ethics-opinions
• Original opinion: https://www.calbar.org/ethics/Opinions/1967-11.htm

Original opinion text

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

Ethics Opinions - FORMAL OPINION NO. 1967-11

Editor's Note: Please refer to the California Rules of Professional Conduct Cross Reference Chart for a table indicating the corresponding current operative rule. There, you can also link to the text of the current rule.

Ethical considerations involved in an attorney's duty of candor to opposing counsel.

Rule 1 of the Rules of Professional Conduct of the State Bar.

A member of the State Bar of California has asked the Committee for an advisory opinion on the ethical dilemma presented by the following situation:

The attorney was retained to represent a carpenter who had performed labor and supplied materials for an addition to a home. On the client's behalf, the attorney brought suit against the owner to foreclose a mechanic's lien. The action was contested and, after a trial of three days, the plaintiff obtained judgment. The defendant did not pay the judgment promptly. The attorney caused a sheriff's sale of the defendant's home to be held. Under the particular state of the law and the facts, no actual notice to the defendant was legally requisite to the validity of the sale and neither the defendant nor defendant's counsel in fact knew of the sale. The plaintiff bid in the property for the amount of the judgment, and thus became the owner of the defendant's home, worth much more than the amount of the judgment, subject only to the defendant's right to redeem within a year.

Some time later the defendant's counsel wrote a letter to the plaintiff's attorney, enclosing the defendant's check for the amount of the judgment. The check was tendered in full satisfaction, but it was legally insufficient for the redemption of the property since it did not include the expenses of the sheriff's sale, the existence of which was still unknown to the defendant and defendant's attorney.

The question presented is whether the plaintiff's attorney could properly have refrained from any action at that time, leaving the letter unanswered and the check unnegotiated, in the hope that the period of redemption would expire before the defendant or defendant's counsel became aware of the fact that their tender had been insufficient.

The Committee realizes that the situation arose some years ago and was properly handled at the time and that, because of an intervening statutory change concerning the kind of notice required for such sales, the problem would probably not recur on precisely identical facts. Nevertheless, the Committee feels that very similar situations are likely to arise from time to time, that the problem is one of a kind that has not previously been explored by the Committee, and that an advisory opinion might therefore be helpful to the bar.

It is the opinion of the Committee that the attorney would not have been justified in keeping silent. It is true that, under [former] canon 15 of the Canons of Ethics of the American Bar Association, an attorney must zealously advance the interests of his client, but not by using "any manner of fraud or chicane. He must obey his own conscience and not that of his client." One of the obligations of conscience to which the lawyer must conform is stated in [former] canon 22: his conduct with other lawyers "should be characterized by candor and fairness." [Former] canon 29 states that a lawyer "should strive at all times to uphold the honor and to maintain the dignity of the profession . . ." All of the canons are commended to the members of the State Bar by rule 1 of the Rules of Professional Conduct of the State Bar.

In the opinion of the Committee, it would not have been candid or fair to opposing counsel to keep silent under these circumstances. The Committee does not mean to suggest that a lawyer is automatically under a duty to warn another lawyer who may be about to allow a time limit to expire or neglect some step important to the preservation of his client's rights. Ordinarily, there is no affirmative duty to warn. But in matters of ethics, as in the law of fraud, circumstances sometimes arise under which silence is, in itself, deceptive. We think this is such a situation.

There are three elements present here which, existing in combination, created an ethical obligation to disclose the facts about the sale, or at least to return the check so as to put opposing counsel on inquiry. They are as follows:

1. The receipt of a check normally calls for some action: either to accept it, which implies acceptance of the conditions on which it was tendered, or to reject it. In business and legal transactions, payments made are usually retained; one who has transmitted a check would naturally assume that it had been found acceptable unless informed of its rejection. Total inaction, when intended as the equivalent of a rejection, is misleading.

2. Since the plaintiff's attorney knew of the sale and knew that opposing counsel was ignorant of it, a course of inaction and silence would have had an intentionally deceptive effect. The purpose would have been to induce opposing counsel to assume that the matter was closed, in order to reduce the likelihood that it would occur to him that something might be wrong and that he had better investigate.

3. A failure to disclose the legal insufficiency of the check, had it led to the loss of the right of redemption, would have produced a grossly unconscionable result by which the defendant, who was attempting to discharge his obligation, would have forfeited his home and the plaintiff, who was equitably and morally entitled only to the payment of his bill and expenses, would have been unjustly enriched.