If a creditor serves a writ of execution on a lawyer for client funds held in the lawyer's trust account, may the lawyer turn the funds over?

Plain-English summary

The Committee was asked whether a lawyer may, consistent with the lawyer's ethical obligations, honor a writ of execution against client funds held in the lawyer's trust account. Assuming the funds were truly the client's, and that a valid writ and notice of attachment under AS 09.35.010 had been served, the opinion concluded that nothing in the Alaska Rules or other ethical considerations prevents the lawyer from honoring the writ.

The opinion explained that Rule 1.15 requires a lawyer to keep client property separate and to deliver it on the client's direction, but that under Rule 1.15(c) a lawyer in possession of property claimed by both the client and a third party must keep the disputed portion separate until the dispute is resolved. Against this, AS 09.40.040 requires the holder of a judgment debtor's funds to pay them over under the writ or be personally liable to the judgment creditor, with no exception for attorney trust accounts, and Alaska Civil Rule 69(f) directs that funds collected by a process server be delivered to the issuing court. The opinion cited Willner's Fuel Distributors v. Noreen, 882 P.2d 399 (Alaska 1994), which reversed summary judgment for a lawyer sued by a client's judgment creditor for failing to pay over trust-account funds.

The Committee concluded that any conflict between Rule 1.15(c) and AS 09.40.040 was more apparent than real, because the purpose of keeping disputed property separate (preserving it pending an orderly resolution) is served equally well by paying the funds to the process server, who must deposit them with the court. Accordingly, any literal reading of Rule 1.15(c) that would bar turning over attached trust funds gave way to AS 09.40.040 and Civil Rule 69. The opinion added, in a footnote, that Rule 1.4 obligates the lawyer to inform the client of the writ so the client can take steps to protect the client's interests.

Currency note

This opinion was issued in 1998, before Alaska's adoption of the 2009 revisions to the Alaska Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could a lawyer be disciplined for paying client trust funds to a judgment creditor under a writ?

A: The opinion concluded that honoring a valid writ of execution against client trust funds does not violate the Alaska Rules; the lawyer pays the funds to the process server.

Q: Doesn't Rule 1.15(c) require holding disputed funds separately?

A: Per the opinion, the apparent conflict is not real, because the purpose of keeping disputed property separate is served by paying the funds to the process server, who deposits them with the court pending resolution.

Q: Does the lawyer have to tell the client about the writ?

A: Yes. The opinion noted that Rule 1.4 obligates the lawyer to inform the client of the writ so the client can take steps to protect the client's interests.

Background and rules framework

The opinion interpreted Alaska Rule of Professional Conduct 1.15 (safekeeping property; Model Rule 1.15), including Rule 1.15(c) on property claimed by both the client and a third party, and Rule 1.4 (communication; Model Rule 1.4). It read those rules against Alaska statutes and rules of procedure: AS 09.35.010 (writ and notice of attachment), AS 09.40.040 (duty to pay over a judgment debtor's funds), and Alaska Civil Rule 69(f) (delivery of collected funds to the court).

Citations and references

Rules of Professional Conduct:

• Alaska RPC 1.15(a), (b), (c) (safekeeping property; disputed claims)
• Alaska RPC 1.4 (communication)

Statutes and rules:

• AS 09.35.010 (attachment); AS 09.40.040 (duty to pay over funds)
• Alaska Civil Rule 69(f)

Cases:

• Willner's Fuel Distributors v. Noreen, 882 P.2d 399 (Alaska 1994)
• Von Gemmingen v. First National Bank, 789 P.2d 353 (Alaska 1990)

See also

• AL Ethics Op. 1990-48: Interpleading Disputed Funds
• ISBA Ethics Op. 02-02: Fees From a Dissolved Client's Trust

Source

• Landing page: https://alaskabar.org/ethics-discipline/ethics-opinions/adopted-ethics-opinions-chronological/
• Original PDF: https://alaskabar.org/wp-content/uploads/98-3-corrected.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

ALASKA BAR ASSOCIATION
ETHICS OPINION 98-3
Obligation Of Lawyer To Honor Writ Of Execution
Against Client Funds In The Lawyer’s Trust Account

The Ethics Committee was asked whether a lawyer may, consistent with
the lawyer’s ethical obligation, honor a writ of execution against client funds
held in the lawyer’s trust account. Assuming funds held in the lawyer’s trust
account are truly those of the client, that is, the client may direct disposition of
the funds at the client’s discretion, and that a valid writ and notice of
attachment pursuant to A.S. 9.35.010 have been served on the lawyer, it is the
opinion of the committee that nothing in the Alaska Rules of Professional
Conduct (ARPC), or other ethical considerations, prevents a lawyer from
honoring the requirements of the writ.
A lawyer is required to keep a client’s funds or other property entrusted
to the lawyer separate from the lawyer’s own property, ARPC 1.15(a), and
deliver it to the client and render an accounting whenever the client so directs.
ARPC 1.15.(b). That obligation is limited, however, when a third party asserts
a claim to the property:
When in the course of representation, a lawyer is in
possession of property in which both the lawyer and
another person claim interest, the property shall be
kept separate by the lawyer until there is an
accounting and severance of their interests. If a
dispute arises concerning their respective interests,
the portion in dispute shall be kept separate by the
lawyer until the dispute is resolved.
ARPC 1.15(c)
Pursuant to A.S. 09.40.040, the holder of the funds of a judgment debtor
(or a defendant whose property has been attached pre-judgment) must pay over
such funds pursuant to requirements of the writ of execution or be personally
liable to the judgment creditor for any amount wrongfully withheld. Von
Gemmingen v. First National Bank, 789 P.2d 353, 356 (Alaska 1990); Willner’s
Fuel Distributors v. Noreen, 882 P.2d 399, 403 (Alaska 1994). No exception
appears in the statutory scheme for funds held in attorney trust accounts.

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See, Willner’s Fuel Distributors v. Noreen, supra, (reversing summary
judgment granted a lawyer on a claim brought by a client’s judgment creditor
pursuant to A.S. 09.40.040 alleging wrongful failure to pay over a client’s funds
in the lawyer’s trust account pursuant to a writ of attachment). Funds
collected by a process server pursuant to the writ of attachment must be
delivered to the court issuing the writ. rule 69(f)(22), Alaska Rules of Civil
Procedure.
While ARPC 1.15(c) requires that disputed property, including funds held
in a trust account be “kept separate by the lawyer,” pending a resolution of the
dispute, A.S. 09.40.040 requires such funds to be paid to the process server.
The committee believes, however, that any conflict created by these provisions
is more apparent than real because the purpose of the requirement that the
lawyer keep the property separate--so the property will be preserved pending
an orderly resolution of the dispute--will be served equally well by paying the
trust account funds to the process server who must deposit them with the
court.1 Accordingly, any suggestions that a literal reading of ARPC 1.15(c)
prevents the lawyer from turning over trust account funds attached by a
judgment creditor must fall to the specific requirements of A.S. 09.40.040 and
ARCivP 69.
Approved by the Alaska Bar Association Ethics Committee on January 8, 1998.
Adopted by the Board of Governors on January 16, 1998.

G:\DS\COMM\EC&OPS\OPINIONS\98-3.DOC

1 Of course, ARPC 1.4, which requires a lawyer to keep the client reasonably informed about

the status of the matter undertaken on the client’s behalf, obligates the lawyer to inform the
client of the service of the writ so that the client can take steps to protect the client’s interests.

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