Blog Post

Colorado Accident & Injury Law Part III-Safekeeping of Property

Posted by: Michael Sawaya
July 29, 2009
Topic: Personal Injury

ETHICAL TRAP FOR UNWARY COUNSEL:

A. COLO. RPC 1.15 REGARDING THE SAFEKEEPING OF PROPERTY.

Attorney is required to promptly deliver to third parties properly claimed funds or other property that is received by the attorney.
Attorney is required to give a fully accounting of said funds or property.
Attorney is required to keep property separate in the event there are claims of two or more persons. Prompt distribution of funds is required if there are no disputes as to the claim.

B. CBA Ethics Opinion 94, ETHICAL DUTIES RELATING TO A CLIENT'S PROPERTY HELF BY A LAWYER IN WHICH A THIRD PARTY HAS AN INTEREST.

This Opinion sets forth a recommended standard for attorneys to follow in these situations.
In general, an attorney is probably in violation of the RPC 1.15 when he or she has signed a lien, and gives this money directly to his or her client.
An ethical problem would arise if there is a statutory lien, or a known contractual lien that the attorney ignores.
The problem is not present if it is an obligation of the client for which there has been no promise to be repaid from funds or property received by the client in the case for which the attorney is representing the client.
It is less clear what an attorney should do if he or she is told by a client or someone else (such as a treating medical provider) that the client verbally promised that a bill would be paid from proceeds or property the client receives in a case. At the very minimum the attorney much determine if that promise was truly made and what the likely terms were of that offer. If the client agrees that there was such a promise, then the attorney should safeguard the dollar amount or the property so promised. If the client plausibly denies making the promise, then the attorney probably can safely give the client the money or the property. Ignoring the matter simply because it was not supported by a signed writing is not advised.
The full opinion is recommended for reading and careful review.