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Ohio Legal Ethics Narrative

IV. transactions with persons other than clients


4.1:100 Comparative Analysis of Ohio Rule

4.1:101 Model Rule Comparison

Ohio Rule 4.1 is substantively identical to its Model Rule counterpart, with the following two exceptions:

In division (b), "an illegal" has been substituted for "criminal" and the final clause, ", unless disclosure is prohibited by Rule 1.6.", has been deleted.

4.1:102 Ohio Code Comparison

The following section of the Ohio Code of Professional Responsibility is listed in the Correlation Table (Appendix A to the Rules) as related to Ohio Rule 4.1(a): DR-7-102(A)(5).

The following sections of the Ohio Code of Professional Responsibility are listed in the Correlation Table (Appendix A to the Rules) as related to Ohio Rule 4.1(b): DR 7-102(A)(3) & 7-102(B)(1).

4.1:200 Truthfulness in Out-of-Court Statements

  • Primary Ohio References: Ohio Rule 4.1(a)
  • Background References: ABA Model Rule 4.1(a)
  • Ohio Commentary: Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 7.49
  • Commentary: ABA/BNA § 71:201; ALI-LGL § 98; Wolfram § 13.5

The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 7.49 (1996).

Under the Ohio Rules, treatment of a lawyer's false statement of law or fact depends on to whom the statement is made and whether the statement is made in the course of representing a client. False statements made to a tribunal are addressed in Ohio Rule 3.3(a)(1). See section 3.3:200. False statements made to a third person during the course of the representation are treated by Ohio Rule 4.1(a). Ohio Rule 8.4(c) encompasses false statements to anyone (the court, third-parties, the client), in any context, regardless of whether the lawyer is representing a client. See section 8.4:400.

Ohio Rule 4.1(a) deals with a lawyer's false statement of law or fact to others, and the Rule (unlike former OH DR 7-102(A)(5)) is expressly so limited -- the lawyer in the course of representing a client shall not "knowingly. . . (a) make a false statement of material fact or law to a third person." Ohio Rule 4.1(a) (emphasis added). Note also the distinction between Rule 3.3(a)(1) and 4.1(a) in terms of materiality: any false statement of fact made to a court is sanctionable (although the failure to correct a previous false statement to a court is limited to a previous misstatement of material fact), whereas false statements of fact made to others are sanctionable only if material. Also, while representations made to a court will almost always be made while representing a client, Rule 3.3(a)(1) is not expressly so limited. Compare Rule 4.1(a) ("[i]n the course of representing a client").

Key to understanding Rule 4.1(a) is the meaning of the phrase "false statement of material fact." Its meaning turns on three factors – what constitutes a false statement, what is a statement of fact, and when will such statements be considered material.

As Comment [1] makes clear, the phrase "false statement" is not limited to affirmative falsehoods. Rather it extends as well to incorporating or affirming a statement the lawyer knows to be false, and making partially true but misleading statements or omissions. Ohio Rule 4.1 cmt. [1].

Comment [2] recognizes that what constitutes a fact "depends on the circumstances." Ohio Rule 4.1 cmt. [2]. For example, certain generally accepted conventions in negotiation allow negotiators to make statements that appear factual, but which are treated instead as mere puffery. Examples that usually fall in this category include estimates of price or value, a party's bargaining range, or the existence of an undisclosed principal. Id.

False statements of fact violate the Rule only when they are material. The ordinary meaning of the term should apply in this context.

Disciplinary cases under former OH DR 7-102(A)(5) involving false statements to third persons include Dayton Bar Ass'n v. Gross, 17 Ohio St.3d 206, 478 N.E.2d 792 (1985), in which the respondent, among other fabrications, lied to Social Security officials on behalf of his client, wrote a bad check to a nursing home on behalf of his client, and lied to disciplinary authorities investigating the charge that, in exchange for repayment of money owed, he obtained his client's signature on a release withdrawing an ethics complaint. In each of these instances, respondent was found to have violated OH DR 7-102(A)(5). Accord Disciplinary Counsel v. Frazier, 110 Ohio St.3d 288, 2006 Ohio 4481, 853 N.E.2d 295 (knowingly and falsely representing to opposing counsel that he was still counsel for client, even though statement made six months after he had been indefinitely suspended); Disciplinary Counsel v. Hutchins, 102 Ohio St.3d 97, 2004 Ohio 1805, 807 N.E.2d 303 (respondent fabricated court order in connection with client's divorce proceeding and sent it to escrow agent for title company handling sale of jointly owned property); Cincinnati Bar Ass'n v. Deaton, 102 Ohio St.3d 19, 2004 Ohio 1587, 806 N.E.2d 503 (lying to client's mortgage company that client was no longer obligated to pay child support); Stark County Bar Ass'n v. Hare, 99 Ohio St.3d 310, 2003 Ohio 3651, 791 N.E.2d 966 (in adoption matter, lying to attorney for birth mother about amount of his fees); Dayton Bar Ass'n v. Kinney, 89 Ohio St.3d 77, 728 N.E.2d 1052 (2000) (lying to liquor-control board); Office of Disciplinary Counsel v. Miller, 79 Ohio St.3d 115, 679 N.E.2d 1098 (1997) (assisting client in filing false federal corporate-tax return).

Cleveland Bar Ass'n v. McMahon, 114 Ohio St.3d 331, 2007 Ohio 3673, 872 N.E.2d 261, is the most recent example of violation of the Code provision. In McMahon, the respondent represented a passenger injured in a two-car collision.  In order to persuade the insurer for the driver of the other car to enter into settlement negotiations, McMahon wrote a letter to the insurance company in which he purported to quote nonexistent testimony given by the driver at a nonexistent hearing before the Shaker Heights Municipal Court.  The invented testimony had the driver conceding that she was at fault and the judge finding her guilty of the traffic charge of improperly changing lanes.  This knowingly false statement of fact violated former DR 7-102(A)(5), for which respondent was suspended for six months, rather than the public reprimand recommended by the panel or the six-month stayed suspension recommended by the Board (and the two dissenting justices).

4.1:300 Disclosures to Avoid Assisting Client Fraud [see also 1.6:395, 1.6:670]

  • Primary Ohio References: Ohio Rule 4.1(b)
  • Background References: ABA Model Rule 4.1(b)
  • Commentary: ABA/BNA § 71:203; ALI-LGL §§ 67, 94; Wolfram §§ 12.6, 13.3

Rule 4.1(b) prohibits a lawyer, in representing a client, from knowingly failing to disclose a material fact when disclosure is necessary to avoid assisting an illegal or fraudulent client act. While the disclosure obligation in Rule 3.3(b) is directed to known criminal or fraudulent conduct by any person (including a client) related to a proceeding before a tribunal, the language of 4.1(b) read literally seems to command disclosure necessary to avoid assisting any "illegal or fraudulent act by a client." Although the answer is not entirely clear, the context suggests that the prohibition is directed to dealings with a third person, with Rule 3.3(b) being the operative provision for comparable conduct directed toward a tribunal. Rule 4.1 is entitled "Truthfulness in Statements to Others," and the overall heading for Rules 4.1-4.4 is "Transactions with Persons Other than Clients." The "dealing with others" language in Comment [1] is consistent with this reading. Rule 4.1 cmt [1]. See also the Ohio Code Comparison to Rule 4.1 ("Division (b) parallels . . . the 'fraud on a person' portion of DR 7-102(B)(1). The 'fraud on a tribunal' portion of DR 7-102(B)(1) is now found in Rule 3.3.").

Note as well that the assisting-an-illegal-or-fraudulent-act-by-a-client language in Rule 4.1 is similar to the prohibition contained in Rule 1.2(d). While 1.2(d) does not itself contain disclosure obligations, the 4.1(b) disclosure obligations may well come into play when a lawyer is discharging 1.2(d) duties. See Ohio Rule 4.1 cmt. [3].

Rule 4.1(b) is one of the numerous instances in the Ohio Rules where "illegal" has been substituted for the Model Rules word "criminal." (See Rules 1.2(d), 1.6(b)(2), 1.16(e)(2), 8.4(b).) In using "illegal," the Task Force not only has injected a term that was not present in the OHCPR analogs to Rule 4.1(b) (OH DR 7-102(A)(3) and 7-102(B)(1)), but also puts Ohio's version of Rule 4.1 in a class by itself: so far as we are aware, Ohio is the only Model Rule jurisdiction that has replaced "criminal" with "illegal" in Rule 4.1(b). See further discussion of the "illegal"/"criminal" issue at section 1.2:600.

As noted above, Ohio Rule 4.1(b) deals with assisting "illegal" or fraudulent conduct by a client, not "criminal" or fraudulent conduct. Also unlike the Model Rule, if disclosure is necessary in order to comply, the Ohio Rule obligates a lawyer to make such disclosure, even if the material fact would otherwise be protected by the attorney-client privilege. Rule 4.1 cmt. [3]. Why Comment [3] refers only to the privilege and not information relating to the representation protected by Rule 1.6 is unclear; Ohio Rule 1.6(c) clearly states that disclosure of such information necessary to comply with Rule 4.1 is mandatory. Comment [3] also states that the Rule calls for disclosure if the client persists in the illegal or fraudulent act and "[i]f withdrawal is not sufficient to avoid such assistance."

Such disclosure may include disaffirming an opinion, document, affirmation or the like or may require further disclosure . . . . Disclosure is not required unless the lawyer is unable to withdraw or the client is using the lawyer's work product to assist the client's illegal or fraudulent act.

Id. (Comment [3] is internally inconsistent in speaking first of disclosure being required "[i]f withdrawal is not sufficient"; subsequently, the comment states that disclosure is not required "unless the lawyer is unable to withdraw." (Emphasis added.) Nevertheless, the thrust of the comment seems to suggest that withdrawal is the favored course if it will be enough to avoid assisting the illegal or fraudulent act of a client.)

Comment [4] reminds that the Rule addresses only "ongoing or future" illegal or fraudulent client acts. If the lawyer subsequently becomes aware of past illegal or fraudulent client acts, pursuant to Rule 1.6(b)(3) the lawyer may, but is not required to, reveal information reasonably necessary to mitigate injury to financial or property interests of another resulting from the commission of such acts in the furtherance of which the client has used the lawyer's services. Rule 4.1 cmt. [4].

Under the former OHCPR, there were only a limited number of cases dealing with a lawyer's failure to disclose a material fact in order to avoid assisting client fraud on a person or entity other than a tribunal. See Dayton Bar Ass'n v. Callahan, 36 Ohio St.3d 179, 522 N.E.2d 542 (1988), where respondent admitted that he should have disclosed the true purpose of the marriage of his clients (entered into to affect favorably the husband's immigration status) to the Immigration and Naturalization Service when he submitted forms on their behalf to the INS. In so doing, respondent was found to have violated former OH DR 7-102(A)(3), among other disciplinary rules, and, in a federal criminal proceeding, 18 USC §§ 1001, 1002 (2000) (fraud; false documents). Accord Columbus Bar Ass'n v. Cooke, 111 Ohio St.3d 290, 2006 Ohio 5709, 855 N.E.1226 (client made false statement to bankruptcy trustee in presence of respondent, who did nothing to correct statement; DR 7-102(A)(3) violated); Dayton Bar Ass'n v. Korte, 111 Ohio St.3d 273, 2006 Ohio 5705, 855 N.E.2d 1211 (failing to disclose, as required by Ohio Administrative Code, copies of employer's doctor's medical-examination reports of claimant to Bureau of Workers' Compensation and to claimant's counsel); Dayton Bar Ass'n v. Kinney, 89 Ohio St.3d 77, 728 N.E.2d 1052 (2000) (lawyer's failure to disclose his knowing misrepresentation of purchase price of tavern in documents he filed on behalf of seller with Liquor Control Division of Ohio Department of Commerce; OH DR 7-102(A)(3) & (7) violated); Columbus Bar Ass'n v. Culbreath, 88 Ohio St.3d 271, 725 N.E.2d 629 (2000) (knowingly withholding material information from relator's Unauthorized Practice of Law Committee); Office of Disciplinary Counsel v. Camera, 68 Ohio St.3d 478, 628 N.E.2d 1353 (1994) (signing affidavit at sheriff's sale falsely stating that he was not attempting to purchase certain property on behalf of client); Toledo Bar Ass'n v. Fell, 51 Ohio St.2d 33, 364 N.E.2d 872 (1977) (deliberately withholding from Industrial Commission fact of his client's death in order to obtain fee to which he was not entitled).

It is important to emphasize that Rule 4.1(b) requires disclosure of material facts (including those otherwise protected by Rule 1.6), if necessary to avoid assisting in client fraud against third persons. This is so, even though the Task Force in its Ohio Code Comparison to Rule 3.3 states that that Rule 3.3 "does not adopt the DR 7-102(B)(1) requirement that the lawyer reveal the client's fraudulent act, during the course of the representation, upon any person." Requiring such disclosure is, in the Task Force's words, "unworkable." Id. In its Ohio Code Comparison to Rule 4.1, however, the Task Force acknowledges that "[d]ivision (b) parallels ...the 'fraud on a person' portion of DR 7-102(B)(1)." Despite the absence of Ohio cases on the subject, "[n]evertheless, revealing such an ongoing or future fraud is justified under Rule 4.1(b) when the client refuses to prevent it, and the lawyer's withdrawal from the matter is not sufficient to prevent assisting the fraud." Id. Thus, as previously noted, the "fraud-on-a-person" disclosure obligations of former DR 7-102(B)(1) are continued under the new Rules in those circumstances covered by Rule 4.1(b).

See also the obligations in this regard of a lawyer for a publicly-traded company under §  307 of the Sarbanes-Oxley Act (15 USC §  7245 (2002)), discussed at sections 1.6:350 and 1.13:310.