Inquiry: Lawyer A is a trustee in a deed of trust and institutes foreclosure proceedings. At the time he institutes the proceedings, they do not appear to be contested. At the hearing before the clerk, the other side appears with an attorney to contest the proceedings.
1. What is the duty of the lawyer/trustee at this time?
Opinion: The duty of the lawyer/trustee at this time is to act as a fiduciary to preserve the interests of both and to perform such legal duties as will protect the interests of both parties. See CPR 156.
2. May a member of the lawyer/trustee's firm represent the petitioning party?
Opinion: No, as long as lawyer A is the trustee. If the lawyer/ trustee resigned as trustee, either he or another member of his firm could represent the petitioning party as long as no conflict of interest existed because of some prior obligation to the opposing party. See CPR 201. If the trustee cannot represent either party in an advocacy role, no member of his firm may do so. DR 5-105 (D).
3. When the proceeding becomes adverse, what may the lawyer/trustee do at the proceeding?
Opinion: The role of the lawyer/trustee when the proceeding becomes adverse will vary with the circumstances. Generally, the lawyer/trustee may do anything at the proceeding which is authorized by State law and the deed of trust which does not put him in an advocacy role. To try to enumerate everything which the lawyer/trustee might do at the proceeding would put the State Bar in a position of giving a legal opinion rather than an ethics opinion.
4. Does the State Bar now recommend that an attorney should not serve as a trustee in a deed of trust?
Opinion: No. The State Bar does not recommend whether or not an attorney should serve as a trustee in a deed of trust. Whether or not an attorney should serve as a trustee in a deed of trust would depend upon the circumstances, such as whether or not he anticipates an adversarial situation and whether or not he would wish to represent one party in the event that an adversarial situation arose.
5. May a secretary of a law firm be a trustee and the attorney of the same law firm then represent a bank or savings and loan at foreclosure proceedings under the same deed of trust?
Opinion: No. The secretary is in a confidential relationship to the attorney and would receive confidential information communicated to the attorney in connection with the foreclosure proceedings. This role in the law firm of the attorney representing the bank or savings and loan institution is inconsistent with the neutral position which the trustee is obligated to assume.