Attorney Rodriguez is representing a client in a personal injury claim. During settlement negotiations, the opposing party's attorney states, 'My client suffered $50,000 in medical expenses.' Rodriguez knows from previously obtained medical records that the actual medical expenses were only $25,000. Rodriguez does not correct the opposing attorney's statement, hoping it will lead to a more favorable settlement for his client. Has Rodriguez violated the Model Rules of Professional Conduct?
- AYes, because Rodriguez knowingly failed to disclose a material fact when disclosure was necessary to avoid assisting a criminal or fraudulent act by a client.
- BYes, because Rodriguez had a duty to correct a material misrepresentation made by an opposing party.
- CNo, because a lawyer is not generally required to volunteer unhelpful facts in negotiation.
- DNo, because the opposing attorney has a duty to verify their own client's information.
Show answer & explanationAnswer & explanation
Correct answer: B. Yes, because Rodriguez had a duty to correct a material misrepresentation made by an opposing party.
Model Rule 4.1(b) states that a lawyer shall not 'fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.' However, the more direct application here is the duty not to knowingly make a false statement of material fact (Rule 4.1(a)) and the implicit duty not to acquiesce in a misrepresentation. While Rodriguez didn't *make* the false statement, by remaining silent when he *knows* the statement is false and material, and using it to his client's advantage, he is essentially adopting or assisting in the misrepresentation. The comments to Rule 4.1 clarify that a misrepresentation can occur by a lawyer's failure to act. While a lawyer is not generally required to volunteer unhelpful facts, actively allowing an opposing party's known false statement of material fact to stand, especially when it is being used to negotiate, crosses the line into unethical conduct, as it would be assisting in a fraudulent misrepresentation by the opposing party's lawyer, or at least knowingly using a false statement of material fact.
Why the other options are wrong
- A. This option misidentifies the source of the fraudulent act; it's the *opposing party's lawyer* making the misrepresentation, not Rodriguez's client. However, Rodriguez's silence is complicit in the misrepresentation.
- C. While a lawyer isn't always required to volunteer unhelpful facts, this situation involves a *known false material statement* being made by the opposing party that Rodriguez is tacitly allowing to stand for his client's benefit, which is distinct from merely not volunteering information.
- D. The opposing attorney's duty to verify does not absolve Rodriguez of his own ethical duty not to knowingly use or acquiesce in a material misrepresentation known to be false.
Truthfulness in Negotiation (Silence as Misrepresentation)
A lawyer must not knowingly make a false statement of material fact or law. Silence can be a misrepresentation if the lawyer knows a statement made by another is false and material, and the lawyer is actively allowing it to stand for their client's benefit in negotiation.
- No knowingly false statements of material fact/law.
- Silence can constitute misrepresentation.
- Applies to material facts, not just 'puffery'.
Memory trick: Don't 'Silence' a 'Lie' that's 'Material' for 'Gain', or 'Ethics' will 'Stain'.