111 N.J.L.J. 392
April 14, 1983
Conflict of Interest
Title Insurance Company
The inquiry here is whether, on the facts presented below, an
attorney who owns a minority stock interest in a local title
abstract company is precluded by Opinion 495, 109 N.J.L.J. 329
(1982), from obtaining for a client title insurance from a
nationally known underwriter which owns a majority interest in the
same abstract company.
The facts presented here indicate that the local company acts as an agent of the underwriter and is authorized to issue title binders and policies. The local company is managed by its president, an attorney employed full-time by it. The local company's officers are independently staffed and independently operated. The attorney-shareholder utilizes the company for the benefit of real estate purchaser clients (and that purchaser's mortgage lender) in the same manner as would other attorneys who have no stock interest. Pecuniary benefits to the attorney shareholder are limited to dividends which may be declared by the company. The attorney-shareholder, prior to using the company's services, offers full disclosure to his clients as well as the option of obtaining title insurance elsewhere.