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ETHICS SPOTLIGHTThe Duty of Candor Toward A Tribunal When A Spouse Dissipates Marital Assets Laura W. Morgan,Senior Attorney for Family Law, National Legal Research Group Executive Editor, Divorce Litigation The dissipation of marital assets is a substantial problem in divorce actions. To alleviate this problem, all divorce courts have the authority to enjoin a spouse from transferring or conveying property during the divorce proceedings. See generally Brett R. Turner, Equitable Distribution of Property § 3.05 at 60-63 (2d ed. 1994). In some states, the preliminary injunction is automatic upon the filing of the divorce action. E.g., Colo. Rev. Stat. § 14-10-107(4)(b); 13 Del. C. § 1509; 750 ILCS 5/501.1; Or. Rev. Stat. 107.105(1)(f). In other states, the court's authority to enter an injunction comes from a specific statute. E.g., Ariz. Rev. Stat. § 25-315(A); Cal. Civil Code § 4359; Ind. Code Ann. § 31-1-11.5-7; N.J. Stat. Ann. § 15-55-20(10); N.Y. Dom. Rel. Law § 234; Va. Code Ann. § 20-103; Wash. Code Ann. § 26/08.110; W. Va. Code § 48-2-34. Finally, in the remainder of the states, the court's authority can be said to arise from its general equitable powers. What should a divorce attorney do it he or she becomes aware that a client has dissipated marital assets in violation of an injunction? Both the Model Rules and the Model Code contain various rules directed toward the lawyer's duty of candor toward the tribunal. Model Rule 3.3(a)(2) provides that a lawyer shall not knowingly fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client. This rule is implicit in DR 7-102(A)(3) of the Model Code, which provides that a lawyer shall not knowlingly fail to disclose that which he is required by law to reveal. Lest there be any confusion that these rules require a divorce attorney to disclose to the court that a client has dissipated marital assets, ABA Formal Opinion No. 98-412 (September 9, 1998), provides as follows in the headnote: A lawyer who discovers that a client has violated a court order prohibiting or limiting transfer of assets must reveal that fact to the court if necessary to avoid or correct an affirmative misrepresentation by the lawyer to the court. A lawyer also must disclose the client's conduct or, in the alternative, withdraw from continued representation of the client in the litigation if necessary to avoid assisting the client in a fraud on the court. Continued representation of the client in the litigation may constitute assistance in a fraud on the court where the client's conduct destroys the court's ability to award effective relief to the opposing party. Upon withdrawing from the representation, the lawyer must make a disclosure sufficient to avoid continued reliance by the court on prior representations of the lawyer that now are known to be untrue but, absent such a necessity, the lawyer may not disclose the client's misconduct to the court or successor counsel without the client's consent. Clearly, the wording of this opinion puts the attorney at risk of disbarment for perpetrating a fraud on the court if the attorney fails to disclose the dissipation of assets to the court.
Laura W. Morgan is a Senior Attorney in Family Law at the National Legal Research Group, in Charlottesville, Virginia, a firm that writes memoranda and briefs for attorneys nationwide. Ms. Morgan is the author of "Child Support Guidelines: Interpretation and Application," and is currently Chair of the Child Support Committee of the American Bar Association Family Law Section. She can be reached at: goddess@supportguidelines.com, or phone 1-800-727-6574 or 1-804-977-5690 © 1999 National Legal Research Group FAM-LAW-LIT: A
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