Advisory Opinion: 1543

Year Issued: 1993

RPC(s): RPC 1.7(b)

Subject: Conflict of interest; lawyer who purchased escrow company bringing foreclosure proceedings on behalf of escrow company's clients

The Committee reviewed your inquiry concerning deed of trust foreclosures brought on behalf of clients of an escrow company which you have purchased, and a release of conflict form which you have proposed be signed by the purchaser. On the specific facts of the current request that you initiate a deed of trust foreclosure, in which the escrow company is merely acting as an independent third party to collect interest payments on the account, the Committee was of the opinion that while it might hypothetically be possible to do the transaction as described without violating conflict of interest rules, it is an area fraught with difficulty. In particular, the Committee noted that your "release form" is deficient, as it does not comply with the requirements of RPC 1.7(b) and felt that it should include the opportunity to consult with independent counsel. Furthermore, as to future transactions, because of the many implications and many hypothetical situations which would clearly create conflicts of interest, the Committee was of the opinion that it could not render any opinion that such transactions would be proper.

Advisory Opinions are provided for the education of the Bar and reflect the opinion of the Committee on Professional Ethics (CPE) or its predecessors. Advisory Opinions are provided pursuant to the authorization granted by the Board of Governors, but are not individually approved by the Board and do not reflect the official position of the Bar association. Laws other than the Washington State Rules of Professional Conduct may apply to the inquiry. The Committee's answer does not include or opine about any other applicable law other than the meaning of the Rules of Professional Conduct.