State Bar of Arizona Ethics Opinions
90-11: Scope of Representations; Safekeeping Property; Expediting Litigation
Attorney must exercise independent professional judgment where he has secured and recorded a money judgment, the judgment debtor requests attorney to accept payment and enter satisfaction thereof but client cannot be located to obtain instructions.
October 15, 1990
In 1985, the inquiring attorney represented a property management company. In connection with that representation, he represented one of the landlord-principals in a forcible detainer action against a tenant. A judgment was obtained which included a money award and the judgment was recorded. The inquiring attorney terminated his representation of the company in late 1985. However, the inquiring attorney did not formally withdraw of record as attorney for the landlord-principal.
Thereafter, the broker of the property management company filed a bankruptcy proceeding and the company's corporate status was revoked. The inquiring attorney has had no contact with the broker or anyone else associated with the company since that time.
The inquiring attorney's only contact with the landlord-principal he represented was through the broker of the property management company. He has no idea whether the landlord-principal resides in Arizona or in another state.
The inquiring attorney has recently received an inquiry from the tenant/judgment debtor informing him that monies are being held by an escrow company to satisfy the recorded judgment. The inquiring attorney has been requested to take the monies which the escrow company is holding and file a satisfaction of the recorded judgment. The inquiring attorney has called the phone numbers listed in his file, contacted the Arizona Corporation Commission, searched local telephone directories, and called directory assistance, but has been unable to locate either the property management company, its broker or the landlord-principal. The inquiring attorney believes that attempting to locate these parties will be an exercise in futility.
The inquiring attorney is concerned about the burden of time and expense which would be placed on him in attempting to locate them. He believes he has no authority to prepare and file a satisfaction of judgment on behalf of the landlord.
Under these circumstances, may the inquiring attorney ethically decline to accept the money from the escrow company?
ETHICAL RULES CITED
ER 1.2. Scope of Representation
(a) A lawyer shall abide by a client's decisions concerning the objectives of representation, . . . and shall consult with the client as to the means by which they are to be pursued....
ER 1.15. Safekeeping Property
(b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.
Comment to ER 1.15: "A lawyer should hold property of others with the care required of a professional fiduciary."
ER 1.16. Declining or Terminating Representation
(b) Except as stated in paragraph (c), a lawyer may withdraw from representing a client if withdrawal can be accomplished without material adverse effect on the interests of the client, or if:
(5) the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client;
(d) Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as giving reasonable notice to the client,...
ER 3. 2. Expediting Litigation
A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client.
Comment to ER 3.2: "Delay should not be indulged merely for the convenience of the advocates, or for the purpose of frustrating an opposing party's attempt to obtain rightful redress or repose. The question is whether a competent lawyer acting in good faith would regard the course of action as having some substantial purpose other than delay.”
RELEVANT PRIOR ARIZONA OPINIONS
Opinion No. 137 (January 10, 1964)
Opinion No. 80-11 (March 27, 1980)
Even though the inquiring attorney undertook the 1985 litigation at the request of the property management company (the agent of the landlord), the inquiring attorney's client in that litigation was the landlord. The inquiring attorney is, therefore, required to abide by the landlord's directions concerning the objectives of representation, according to ER 1.2(a). Certainly, obtaining a satisfaction of judgment in a collection matter is the ultimate objective of the lawsuit.
The inquiring attorney would therefore normally be required to abide by the landlord's directions concerning whether or not to accept the money. However, ER 1.2(a) assumes the presence of a client who can give the attorney instructions concerning the objectives of representation. The rule is silent as to what an attorney does when his client is missing. This committee addressed this issue in its Opinion No. 80-11 (March 27, 1980), when it discussed the ethical obligations of an attorney who was unable to communicate with his client in a pending lawsuit. The committee determined that the attorney should exhaust all reasonable methods to communicate with the client, and that if the attorney still could not contact the client, and could not reasonably carry out his employment effectively, he should withdraw. Opinion No. 80-11 at 2.
A complete list of all reasonable methods is, of course, impractical, and depends largely on the facts of the particular situation. It appears that the inquiring attorney has already engaged in significant efforts to locate his client. One ethics committee has suggested that an attorney publish notice in a newspaper of general circulation in the area of his law practice and in the area where the lawyer suspects his client resides or does business. See State Bar of Michigan ethics opinions CI-1143 and CI-1144 (both-dated April 9, 1986). In our Opinion No. 137 (90-11) 3 (January 10, 1964), this committee, in advising an attorney whose client was missing, concluded:
“The practical question, which only the inquiring attorney can answer, is whether he believes in good judgment and conscience that he has exhausted all reasonable means of contacting the client personally to determine the client's wishes and position, and that a motion for withdrawal is justified under the circumstances as the attorney knows them.
"The inquiry presents a question of judgment in which the opinion of the Committee should not be substituted for that of the attorney, because of his better knowledge of the client and of all the facts upon which his determination must be made." Opinion No. 137 at 1.
We believe the inquiring attorney should exercise his own independent judgment to determine whether all reasonable methods of contacting his client have been exhausted.
Although our Opinion No. 80-11 was based on former DR 2-110(C) (1)(d) of the Code of Professional Responsibility, there is a substantially similar provision in ER 1.16(b)(5) of the present Rules of Professional Conduct. This rule permits a lawyer to withdraw from representation, even if the withdrawal has a materially adverse effect on the client's interests, if the representation has been rendered unreasonably difficult by the client. Clearly, a client who disappears, leaving the lawyer without any reasonable means of contacting him regarding the objectives of representation, has made the lawyer's representation of the client "unreasonably difficult" for the purposes of ER 1.16(b) (5). Therefore, we conclude that, if the inquiring attorney has exhausted all reasonable methods of communicating with his client, he may ethically decline to accept the funds on behalf of the client, and may withdraw from further representation of the client.
Of course, should the inquiring attorney elect to terminate his representation of the landlord, he must take steps to the extent reasonably practicable under the circumstances to protect the landlord's interests, as required by ER 1.16(d).
However, the inquiring attorney is not ethically obligated to refuse the money and terminate representation. He may ethically decide to act in the best interests of his absent client by accepting the money and continuing the search for the client. This is because ER 1.16(b) (5) permits, but does not mandate, the inquiring attorney's withdrawal from the case.
Accepting the tendered amount may be a particularly viable course of action under the facts of the present inquiry, where a judgment has already been obtained and the dollar amount is liquidated. Consequently, there is no element of discretion on the client's part (as there would be where a client must decide whether to accept a settlement offer in a pending matter, as was the case in our Opinion No. 80-11), and it is easier to determine that it would be in a client's best interests to accept the money, and continue to attempt to locate the client. If the inquiring attorney does decide to accept the money, he must, of course, keep it in a separate account and maintain it with the care of a professional fiduciary, as required by ER 1.15 and the Comment thereto.
The inquiring attorney should therefore exercise his independent judgment to decide whether he should (1) accept the money, sign a release, and then search for his client, or (2) determine that, under the circumstances, he was no longer acting on behalf of his client. The amount of time since the judgment was recorded and the difficulty in locating the client are both factors the inquiring attorney may take into consideration in determining whether he will continue to act on his client's behalf. In addition, the inquiring attorney should consider the language of ER 3.2. If there is a reasonable means of contacting the client, the refusal of the inquiring attorney to accept the money and provide the satisfaction of judgment would arguably have no practical effect other than to delay and burden the judgment debtor, in violation of ER 3.2.
In conclusion, the inquiring attorney's decision whether to continue to act on behalf of his client is a question that must be determined by an analysis of the facts and circumstances surrounding the case. The inquiring attorney is called upon to use his own best judgment in this matter. As noted in paragraph 6(d) of this committee's Statement of Jurisdictional Policies, we will not render opinions on questions involving solely an attorney's exercise of judgment or discretion.
Formal Opinions of the Committee on the Rules of Professional Conduct are advisory in nature only and are not binding in any disciplinary or other legal proceedings.
©State Bar of Arizona 1990