87.15

OPINION NO. 87-15

An opinion has been requested from the Clerk of a County Circuit Court concerning how the Ethics Law and prior Commission Opinions would impact on the private activities of several employees of the Clerk's Office. The request involves three individuals in the Office's Recording Department, and two others, one in the Accounting Department and another in the File Room. Based on the description of the Office's organization and activities and the kinds of activities in which these individuals engage, we advise that as a general matter private work that involves employers or records with which they would generally be expected to deal in their Clerk's Office duties is prohibited by the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law).

The Constitution of Maryland establishes a Circuit Court for each County and Baltimore City (Article IV, § 20). Section 1-501 of the Courts and Judicial Proceedings Article, Annotated Code of Maryland, describes the circuit courts as "the highest common-law equity courts of record exercising original jurisdiction in all civil and criminal cases within its county...." Generally, the Circuit Court handles major civil cases and the more serious criminal matters. It may also decide appeals from the District Courts and from certain administrative agencies, and only the Circuit Courts hear jury trials.

The Circuit Court Clerk's Offices are also established by the Maryland Constitution (Article IV, § 25). The Clerk is elected and holds office for a four-year term. The general duties of the Clerk are set forth in § 2-201(a) of the Courts and Judicial Proceedings Article, and include among other things, making "proper legible entries of all proceedings of the court and keep*ing* them in well bound books or other permanent form," recording any paper filed with the office and required by law to be recorded in the appropriate place, issuing all writs which may legally be issued from the court, and administering oaths. The Clerk's Office thus acts as the keeper of court cases, land transactions and licenses and also as supportive staff to the Court.

The Clerk's Office involved in this request is in one of the larger Maryland jurisdictions, and has a Chief Deputy Clerk and four Assistant Chief Deputies. The Assistant for Land Records handles the areas of recording, reproduction and indexing of land documents; the Assistant for Administration and Facilities is responsible for accounting, data processing, personnel and licenses; the Judicial Assistant supervises the Equity, Civil, Criminal, Juvenile and Appeals Department; and the other Assistant covers Court Operations, including trusts and adoption, the File Room, records management, assignment and court clerks.

More particularly, the Assistant for Land Records supervises the Recording Division, which is responsible for receiving and recording all documents regarding real property transactions in the County after they are processed through the transfer agency and the Department of Assessments. Recording Division staff determine and collect the fees on the instruments based on the consideration and in accordance with established rates and formulas, clock them in by date and time, and assign liber and folio numbers. Papers are then sent to Indexing, where they are indexed according to grantor name, grantee name, and street identification, and are retained in books or on microfiche, depending on the date of the record.

Land instruments may be presented for recording in person or through the mail. As documents are not considered to be legally recorded until the processing is actually done by the Recording Division, many title companies and attorneys will handle the recording in person. This avoids delays resulting from the Office backlog, as mail work would be held until time is available to work on it, while a person at the counter would be served directly. Handling recording in person at the counter also avoids delays that could result from errors in the papers (usually in the computation of fees). Individuals presenting documents in person are permitted to make adjustments and can use a phone or a typewriter at the Clerk's Office to facilitate this, but Clerk's Office staff are not permitted to make any corrections to documents.

The title searching and abstracting process done as a preliminary to the land transaction being recorded uses records generated in the process and tends to involve the same individuals or companies that present papers at the Recording Desk, usually attorneys, or runners or couriers for title companies or other entities involved in the land transaction. Persons involved in the abstracting process have access to all of the records in the Recording Division, even those that were received in the mail and pending action. Employees in the office will provide assistance to individuals that do not know the process, but most of the title companies and lawyers are familiar with the process. According to the Land Records Assistant, it currently takes about 3—6 days from the time a document is recorded and indexed until it is physically placed in the Record Room, the public area that is the final place to receive an instrument. The Record Room is open to the public until 10:00 p.m. on weekdays and from 8:30 a.m. until 3:30 p.m. on Saturdays and holidays. The Clerk's Office itself is open for receipt of business from the public from 8:30 a.m. to 4:30 p.m. weekdays.

The Office's Accounting Department is a central support services type of office that handles the cash and the records of accounts receivable and accounts payable for all money taken in by the Court. It is responsible for cash receipts and general accounts, and for maintaining and reconciling checking and savings accounts. It collects and audits all daily vouchers from all of the Court's Departments, and manages charge accounts and pays bills incurred by the Court. Employees in this office are also responsible for the Clerk's Office bad check file, records of trader's and other licenses, records of photostatic copy activities, and bar library income.

The File Room is a unit that reports to the Assistant Clerk for Court Operations, who has responsibility for many of the records management functions of the agency. Employees in this particular unit, however, work strictly on maintaining judicial case files, and therefore work more closely with staff in the Judicial area. The File Room staff maintain the case files, though they do not actually receive documents, such as pleadings or judgments. These papers are filed with and processed by staff within the respective judicial departments. File Room staff may put pleadings in the file, but this is infrequent and we are advised that their primary job is to pull case files and deliver them to judges or file cases back where they belong. They would expect to deal directly with attorneys and litigants only when they request to see the official file or want copies made of documents in it.

There are five employees whose private activities are presented for consideration in this request. Their Clerk's Office job functions and their private activities are as follows:

Employee A is the supervisor of the Recording Division, which has seven employees. The Employee indicates that he is primarily involved with managing the Recording Desk operation. He says that of the 7 employees in the office, four, including him, are at the desk. Employee A has been working for the Clerk's Office for 10 years. He says that he deals regularly in his State job with title companies and others involved in the land recording activity, spending a significant part of his day on the phone answering questions or resolving problems. This employee has since April 1986 had a private business that involves his working as an independent contractor to title companies. He says that he works primarily with one company, though he may occasionally do work for other companies.

Apparently in the past Employee A has done full title searches. This involves searching the land records for a 60-year period to determine whether there are any liens, encumbrances, or other clouds on a title to real property. Currently, this Employee only does "bring-to-dates." These are title searches that cover a shorter period of time than a full title search, usually from the date of the last transfer of the property, with the purpose being to identify any transactions of the current owner that would have encumbered the property. When asked how he established his relationships with the title companies with which he works, he indicated that, given his Clerk's Office employment, he "knows everybody in the world in this business." The Employee advises that he usually charges a set fee for a particular service, and that his private work could reflect a significant part of his total income.

Another issue presented with regard to Employee A is that his spouse has a business in which she provides recording services to companies and individuals in the land records area. She or her employees therefore appear regularly at the Recording Division of the Clerk's Office (where her husband is the supervisor) to file papers and process documents. The Employee indicates that his spouse's business is incorporated and run solely by her without any investment or involvement by him. He says that when his spouse or her employees come to the Recording Desk they are treated just like any other member of the public.

Employee B works in the Recording Division at the Recording Desk and performs the same duties as described for Employee A and others working the Desk. He has been in the Office about four years, and when asked how he got into the private title business, indicates that he too "knows all the people who are involved" in the land transaction process. Employee B works for several private title companies through a business that is not formally incorporated. He says he does full title searches, a skill that he learned from an individual affiliated with one of the private entities for which he does searches. He indicates that his fee for a search depends upon the nature of the search (for example, whether it is residential or commercial property) and the extent of activity that has to be researched.

Employee C is a numbering clerk in the Recording Division. She says she has a number stamp machine, and after a final check that all the documents are in order, she assigns liber and folio numbers to all of the documents presented at the Recording Desk. These include land documents, financing statements, requests for notice of sale, and judgments. This employee indicates that she does not actually accept any documents for recording, and in fact cannot operate the machines that are used in this process. She may, however, answer questions (for example, about computation of fees) presented by individuals in the office, especially if the line at the Recording Desk gets backed up. Her primary direct dealings with the public occur because individuals may be waiting for her to complete the numbering in order to get their receipt. In her private work, Employee C says that she does only "bring-to-dates" and may also order copies and looks up tax account numbers. She does this for an abstract company and a small title company owned by a friend, and has been doing this since last November.

Employee D works in the Clerk's Office's Accounting Department and his primary duties involve handling the daily check of funds for all of the Departments at the Court House. He collects the cash for the day, audits the funds and makes sure they are all in order, and makes bank deposits. He is responsible for handling all of the copying fee charge accounts that individuals or entities have with the Court. He says that none of these or his miscellaneous duties involve dealings with the public or entities involved in the court records process. Employee D's private work involves credit searches for his father, who is a local attorney. He says for this he uses court proceedings records as well as land records. He determines assets in terms of real property, and searches the court records to determine if the individual has any judgments against him or any outstanding liens or recorded liabilities.

Employee E is a supervisor and one of four employees in the File Room. She says that her job is to pull files to file papers in them, or to distribute them for use in court cases during the week. Staff in her office also pull contempt lists and look for missing files. They do not actually receive pleadings from filers, as this is done by staff in the particular department handling the case. Where a pleading is received the case file is pulled and provided to the judicial department staff for any paperwork needed to be done, and refiled when it is returned. File Room personnel deal with the public, especially case attorneys, when they request access to a file and copies of documents in it.

This employee's private work has involved doing full title searches for a title abstract company. She would search the land records to search the chain of title, and also search the court records, reviewing especially the judgment books to determine if there are any liens or judgments against a property. She has been working part time with the abstract company, but stopped this work when the company decided to hire a full-time person. She says, however, that she has the possibility of working with one or two other individuals involved in title work, and she wants to pursue this as she needs the money.

All of these employees state that their private work is done solely during the evening or weekend hours. They advise that they accept no daytime phone calls, and that they work with public records during hours that they are open and available to any member of the public. Even where an employee's private employer has questions about the information that he provides with a search report, he says that he deals with them only in the evenings. Those that make copies of documents indicate that copies are charged to the accounts of their private employers and the Office's copying facilities are not used for their private employers' benefit. Some of these employees, particularly those at the Recording Desk and in the File Room, work for private individuals or title companies who may appear at their Office to file papers or request access to documents. All of them indicate that everyone who appears in the office for service is served in turn, and that no one who is a private employer receives any special treatment.

We are advised by the Clerk that these outside employment activities were ongoing when he took office but most had been established toward the end of the prior administration. Apparently at least one complaint has been received questioning the propriety of this kind of secondary employment. The Clerk also indicates that there are rumors, undocumented, that employees may be doing private work on office time using office facilities (for private business purposes), or handing out business cards at the office. Though the Clerk advises that he is confident that these employees are not taking advantage of their office position, he indicates that this is difficult to monitor. In addition, there is some concern since entities with which an individual has private employment may be presenting papers in the office, and others who are filing papers are in competition with the Clerk's Office employees' private employers.

It would appear that Clerks of other Circuit Courts have some of these same concerns. In order to gain a clearer insight and to evaluate the scope of policy impact involved in this request, the Commission staff conducted a mail survey of the Clerk's Offices in Maryland, and discussed the issues presented in this matter with other relevant State agencies. Most Clerks expressed significant concerns about this activity, and several indicated that for administrative, ethics or other reasons this type of secondary employment is prohibited in their jurisdictions. Some do allow this type of activity, subject to certain constraints.

This request primarily involves application of the outside employment and prestige of office provisions of § 3-103(a)(1)(ii) and 3-104 of the Ethics Law, as each one of these employees intends to or does engage in some kind of compensated outside employment. Section 3-103(a)(1)(ii) of the Law prohibits employees or officials from having any outside employment that would impair their impartiality or independence of judgment. Section 3-104 of the Law bars the use of prestige of office for one's own personal gain or that of another. In implementing the impairment provisions of § 3-103(a)(1)(ii), we have generally viewed this section as an inconsistent employment provision that complements the more strictly worded authority and contract provisions of subsection (a)(1)(i), applying it where there is a relationship between official duties and private affiliations that raises clear and serious concerns about the likelihood of a conflict of interest or appearance of conflict.

We considered application of this provision in an advisory opinion involving employees in a Clerk's office who wished to be private process servers for attorneys that regularly filed papers with their office. (Opinion No. 84-22.) We expressed concern there that even though the employees' duties were largely administrative, they had obligations to serve all of the public on behalf of the court, and their private employment involved members of the public with which they interacted on a regular basis. We concluded that the inconsistent employment bar would apply, since the provision of services to the private attorneys with whom they had official dealings could have given the appearance of conflict and favoritism that is addressed in § 1 -102(b) of the Law and intended to be avoided by § 3-103(a)(1)(ii).

We were also concerned in that case about application of the provisions of § 3-104 of the Law, which we have consistently interpreted to bar acceptance of fees or other payments for private services that flow directly and immediately from one's employment with the State. We concluded that the individuals' establishment of private economic relationships with the same attorneys with whom they dealt or could deal in their official capacity would constitute the intentional use of their official position for their own economic benefit, that is, to procure clients or their private business. Though we recognized in that Opinion that § 3-103(a)(1)(ii) and 3-104 were not usually absolute prohibitions, we concluded that the circumstances presented there raised conflicts issues requiring application of the Law's prohibitions to absolutely bar the activity.

Moreover, in that Opinion we considered specific principles applying to the Clerk's Offices and the fact that they have been viewed by the Courts as a position of public trust, where the highest standards of conduct are required to ensure public confidence in the even and equal administration of justice. We also noted the fact that the Courts themselves are concerned that the relationship between employees of the Clerk's Offices and members of the public served by the Office must avoid any suggestion of impropriety, as reflected in Rule 1220 of the Maryland Rules. This Rule prohibits the giving or receiving of gifts, gratuities or any compensation from attorneys to an individual related to the individual's official duties and not expressly authorized by law.

In the situation here all of the activities involve use of court records, and therefore present the potential for abuse of official time and other concerns addressed where employees are working with agency records in private activities. For example, since their private work involves records generated or processed by them, if the accuracy of a private record search is questioned, the employees' public and private work could overlap and become an issue. Of more significant concern, however, is the extent to which these activities involve regular dealings (for substantial economic benefit) with individuals or business entities that appear regularly in the Clerk's Office and possibly in the very office in which the employee works. In fact, with the exception of Employee D and the possible exception of Employee E, all of their private relationships are with individuals or entities that appear before or are involved with their agency on a more or less regular basis. Also, some of the employees have indicated that their private businesses have been established because they know, through their official employment, "everybody" involved in the land transaction business.

Under all of these circumstances, we believe that the provisions of the Ethics Law must be applied to bar the employees from having private employment activities with individuals or entities with which they have dealings in the context of their official Clerk's Office duties, or where the private work would significantly involve records generated by or otherwise processed by them. In our view, the concerns presented by these situations are reflected in the fact that a substantial number of Clerks flatly prohibit these kinds of activities, and in many other offices these relationships do not exist.

As to these particular employees, we believe, for example, that this approach would generally apply to bar the current outside employment of those employees working at the Recording Desk (that is, Employees A, B and C). Their private work involves records for which they have official responsibility, as well as provision of title search or abstracting services to attorneys, title companies or private individuals whose papers are filed at the Recording Desk.1 As to Employee D, it appears to us that he does not work with the public or have involvement with private entities, and in any case, his private work is solely with his father, with whom he has no official dealings. This activity would therefore appear not to be prohibited, as long as no special treatment is given and the work does not involve use of Clerk's Office time or materials.

With regard to Employee E, it is not clear from the facts the extent to which her official duties involve the provision by her office of services to the private entity with whom she works or whether she would work privately in any significant way with information processed by her unit. We therefore advise the agency and this Employee that her private activities would be prohibited unless the likely contact of her office with her private employer, and her private use of records processed by her unit, are so limited that the potential concerns addressed in this Opinion do not arise.

In summary, and as guidance for all Clerk's Offices, we advise that employees of the Clerk's Office are prohibited by the employment and prestige of office provisions of the Ethics Law (§ 3-103(a)(1) and 3-104) from engaging in secondary employment that involves any of the following:

1) services that they would be expected to perform for members of the public as part of their Clerk's Office duties;

2) work that significantly involves records that are generated or processed by their unit;

3) provision of services to private entities or individuals with which they or their units would be expected to deal to any significant extent; or

4) use of State time or materials, or special access not generally available to members of the public.

As a technical legal matter employment that does not involve these types of relationships would not be barred by the Ethics Law. It should be noted, however, that this Opinion addresses only the application of the Public Ethics Law. We are aware that many Clerk's Offices prohibit private outside employment activities for a variety of sound management reasons. Section 1-103 of the Law specifically recognizes that agencies may have more restrictive provisions if necessary to deal with particular agency concerns. We therefore wish to make clear that nothing in this Opinion should be read to limit the freedom of the Clerk's Offices to continue more restrictive prohibitions as they deem appropriate.

M. Peter Moser, Chairman
   William J. Evans
   Reverend John Wesley Holland
   Betty B. Nelson
   Barbara M. Steckel

Date: September 23, 1987

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1 We also advise that Employee A must take additional care to avoid being involved in the provision of services to his spouse or her company. Section 3-101 of the Law prohibits an employee from participating in any non-ministerial way in matters in which he or his spouse has a financial interest or which involve as a party an entity with which he or his spouse has certain economic relationships.