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OBA Ethics Counsel

Ethics Opinion No. 281

Adopted September 21, 1974 [Withdrawn and replaced by Legal Ethics Opinion No. 290]

Title insurance companies have sought and obtained the services of attorneys as policy soliciting and issuing agents. Such agents are paid the normal commissions upon policies of title insurance solicited and sold by them.

The Committee has been asked its opinion upon the propriety of attorneys, who are also title insurance company agents, soliciting and writing title insurance policies covering properties purchased by their clients or covering property upon which they have rendered a title opinion for a mortgage company, which in such transactions, is the attorney's client.

An attorney may engage in another business at the same time he is engaged in the practice of law. The attorney, however, must conduct the second business in accordance with the ethical standards which govern the practice of law. Oklahoma Bar Association Legal Ethics Opinion No. 274, 44 Okla. Bar Ass'n J. 2157, adopted June 23, 1973, and Oklahoma Bar Association Legal Ethics Opinion No. 276, 45 Okla. Bar Ass'n J. 560, adopted February 22, 1974. This means that, among other things, no advertising may be engaged in by the attorney with respect to his other business and that the solicitation of business must in all matters, comport with the requirements of the Code of Professional Responsibility, particularly Disciplinary Rules 2_101, 2_103, and 2_104. Subject to these conditions and requirements, it is not improper for an attorney to serve as a soliciting and/or policy issuing agent for an insurance company while the attorney is engaged in the practice of law.

An attorney may not act as an agent for a title insurance company in the placement of title insurance covering the title to property purchased by the attorney's client. Such an intertwined transaction presents serious questions of a conflict of interest between the various interests being represented by the attorney. Disciplinary Rule 5_101(A) and Disciplinary Rule 5_104(A).

The Committee is of the opinion that attorneys should not benefit directly or indirectly, as a policy issuing or writing agent, from their client's purchase of title insurance covering property in which the attorney or his firm has examined the title for such a client or has handled the legal matters incident to the transaction for such a client. The interest of the title insurance company and of the purchaser of title insurance are of a nature which may reasonably be expected to give rise to disputes. In such an event the attorney is in the position of having been the agent and representative of both parties of such transactions. This unseemly posture is not in accordance with the requirements of the Code of Professional Responsibility and the relationship which an attorney at law must maintain with respect to his client.