In the course of litigation involving a partnership dissolution agreement between former partners, A and B, the respective attorneys for A and B learn that prior to hiring an attorney, A and B fraudulently obtained and converted to their own use property that belonged to a third party. The partnership litigation also involves other parties. A and B may be questioned by others concerning the property that was procured by fraud. Truthful answers to these potential questions could reveal the fraud that was perpetrated by A and B.
1. Are the attorneys representing A and B ethically bound to reveal the fraud either to the person who has been defrauded or to the court in which the partnership dissolution is pending?
2. Is DR 7-102(B)(1) limited to fraud perpetrated during the course of the representation?
3. What are the obligations of the attorneys representing A and B once the attorneys have warned their respective clients that they must answer truthfully the questions concerning the property that was procured by fraud?
DR 4-101 provides, "A lawyer shall not knowingly reveal a confidence or secret of his client." The three exceptions to this rule which could apply here are as follows:
1. When there is consent of the client after a full disclosure;
2. When permitted under disciplinary rules or required by law or court order;
3. When there is an intention of the client to commit a crime.
DR 7-102 provides that a lawyer shall not knowingly use perjured testimony or false evidence, and he shall not participate in the creation or preservation of evidence which he knows is false. It also provides an attorney shall not assist his client in conduct that the attorney knows is fraudulent or illegal. Once the attorney receives the information clearly establishing that his client has, in the course of the representation, perpetrated a fraud upon a person or other tribunal, the attorney shall promptly call upon his client to rectify the same, and if the client refuses or is unable to do so, the attorney shall reveal the fraud to the affected person or tribunal.
Article 3810 of the Texas Code of Criminal Procedure provides: "An attorney at law shall not disclose a communication made to him by his client during the existence of that relationship, nor disclose any other fact which came to the knowledge of such attorney by reason of such relationship." This applies not only in criminal cases, but also in civil cases. Cochran v. Cochran, 333 S.W.2d 635 (Tex.Civ.App. 1960, writ ref'd n.r.e.).
Prior opinions of this Committee have addressed the duty of an attorney to preserve the confidences of a client. See Opinions 105, 193, 204, 315, 378, and 384. This Committee does not answer questions of law and therefore does not decide whether failure to reveal information would be in violation of a civil or criminal statute. Obviously an attorney ethically must reveal such information if required to do so by a civil or criminal statute.
1. Question 1 is answered by DR 4-101. The attorney has no duty to reveal a prior fraud to third persons or to the court in the absence of one of the exceptions enumerated herein above.
2. DR 7-102(B)(1) is by its terms limited to fraud perpetrated during the course of the representation. It does not address the issue of fraud perpetrated prior to the representation.
3. The attorneys, having first warned their respective clients that they must testify truthfully concerning the property that was obtained by fraud, may not allow their clients to perjure themselves. The attorneys should further warn their respective clients that in the event they perjure themselves, the attorneys will have to bring this matter to the attention of the court and ask the court to allow withdrawal from the case.
The Committee does not address every factual situation that could come up in the contest of the facts stated. We do not deal with questions concerning sworn pleadings or possible affidavits referring to "partnership" assets, that include the property that was obtained by fraud. Even allowing the client to testify about this property could present severe questions, since such testimony may indicate that the property is truly "partnership" property. That issue is not addressed. This opinion is limited to the specific facts given and the questions asked.