Preparation of Documents for Unrepresented Adverse Party
Adopted: January 15, 2010
Opinion rules that a lawyer may prepare an affidavit and confession of judgment for an unrepresented adverse party provided the lawyer explains who he represents and does not give the unrepresented party legal advice; however, the lawyer may not prepare a waiver of exemptions for the adverse party.
Background:
Supply Company is owed money by Contractor. Contractor is not represented by counsel. Contractor agrees to enter into an affidavit and confession of judgment in favor of Supply Company. The affidavit and confession of judgment is prepared by Supply Company's lawyer. The affidavit and confession of judgment contains a provision that states that Contractor "waives with prejudice any right it may have to appeal, modify, stay, or vacate the judgment, and it expressly waives the 30-day deadline to appeal the entry of the judgment."
Supply Company's lawyer also prepares a document for Contractor to sign entitled "Waiver of Exemptions." The document provides that Contractor has consulted with counsel, has previously executed a confession of judgment in favor of Supply Company, has been advised by counsel of the right to designate property, and has freely, knowingly, and voluntarily waived any and all exemptions provided by Article 16 of Chapter 1C of the North Carolina General Statutes (Exempt Property) and any and all exemptions afforded by Article X (Homesteads and Exemptions) of the North Carolina Constitution.
Inquiry #1:
May the lawyer for Supply Company include language in the affidavit and confession of judgment waiving Contractor's right to appeal, stay, or vacate the judgment and waiving the 30-day deadline to appeal the entry of the judgment?
Opinion #1:
Yes. However, the language in the affidavit and confession of judgment must be clear enough to put Contractor on notice that it is waiving important rights and must be sufficient to make Contractor's waiver knowing, intelligent, and voluntary.
Rule 4.3(a) provides that, in dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not give legal advice to the person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such person are or have a reasonable possibility of being in conflict with the interests of the client.
Comment [2] to Rule 4.3 clarifies that Rule 4.3 does not prohibit a lawyer from negotiating the terms of a transaction or settling a dispute with an unrepresented person. So long as the lawyer has explained that the lawyer represents an adverse party and is not representing the person, the lawyer may inform the person of the terms on which the lawyer's client will enter into an agreement or settle a matter and may prepare documents that require the unrepresented person's signature.
Whether a lawyer may submit documents to an unrepresented person for signature depends upon whether the lawyer's actions are categorized as the rendition of legal advice or mere communication. The Ethics Committee has previously ruled that a lawyer may provide an unrepresented party with a confession of judgment for execution provided the lawyer does not undertake to advise the unrepresented party concerning the meaning or significance of the document or to state or imply that the lawyer is disinterested. See RPC 165. However, it is unethical for a lawyer to provide an unrepresented party with a document that appears solely to represent the position of the adverse party, such as an answer. See CPR 121, CPR 296, RPC 165.
The prohibitions set out in the prior ethics opinions are consistent with Rule 1.7(b)(3), which prohibits a lawyer from representing opposing parties in the same litigation. Providing an opposing party with a response to a complaint, or other responsive pleading, is tantamount to representing that party. Pursuant to RPC 114, when a lawyer gives drafting assistance to a litigant who wishes to proceed pro se, an attorney-client relationship is formed and the Rules of Professional Conduct, particularly those concerning confidentiality and conflict of interest, apply.
The affidavit and confession of judgment is not a responsive pleading and does not solely represent the position of Contractor. Rather, the document represents the terms upon which Supply Company is willing to resolve its claim against Contractor. So long as Supply Company's lawyer has explained that he represents an adverse party and is not representing Contractor, Lawyer for Supply Company may negotiate the terms of the settlement and may prepare the document for Contractor's signature.
Inquiry #2:
The waiver of exemptions provides that Contractor has consulted with counsel, has previously executed a confession of judgment in favor of Supply Company, has been advised by counsel of the right to designate property, and has freely, knowingly, and voluntarily waived any and all statutory and constitutional exemptions. May Lawyer for Supply Company prepare the waiver of exemptions to be signed by Contractor and thereafter filed with the court?
Opinion #2:
No. First, the waiver of exemptions may not state that Contractor has consulted with counsel and has been advised by counsel of the right to designate property unless Contractor has actually received such counsel and advice. If Contractor is unrepresented in the matter, the statement cannot be included in the waiver of exemptions.
Second, Lawyer must determine whether a waiver of either the constitutional or statutory exemptions is legally permissible. Statutory and constitutional exemptions may be waived only under specific circumstances as set forth in the statutes and case law. To the extent that any such waiver is not recognized under the law, Lawyer may not insert such a waiver provision in the documents presented to the unrepresented party.
Finally, if Contractor is unrepresented, it is difficult to imagine how Contractor made a "knowing" waiver of all statutory and constitutional exemptions.