Thursday, October 11, 2012

Attorney's Creditor Not Entitled To Invoke Escrow Rule

The Michigan Attorney Discipline Board has concluded that there is insufficient evidence of any ethical violations and dismissed a matter in which a tri-county panel found misconduct.

The accused attorney represented another attorney in a client dispute in probate court. Sanctions of over $31,000 were imposed against the client and paid to the respondent attorney's law firm.

The sanctions were reversed on appeal and the client sought repayment from the respondent and/or his firm. The probate court denied the relief sought and a bar complaint was filed.

The board found that the situation did not implicate Rule 1.15 (safekeeping property).

The rule does not "contain[] within it a requirement subjecting an attorney to professional discipline whenever an attorney's creditor does not receive prompt payment of a sum (not held in trust and properly so) that an attorney's creditor in 'entitled to receive' "  (Mike Frisch)

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