Can a lawyer apply trust funds held for one purpose to his own fee claim over the client's objection, and may he keep more than the claim is worth?

Plain-English summary

A Florida attorney held in his trust account funds received from the administration of an estate that were owed by the estate to the attorney's former client. The attorney asked the former client for authorization to apply part of those funds to unpaid fees and costs from an earlier, unrelated representation and said he intended to place a "retaining lien" on the funds. The former client refused. The attorney then obtained a default money judgment in small claims court for the fees and costs, and asked whether he could now apply part of the trust funds to that judgment or direct the sheriff to levy on the trust account.

The committee pointed to Integration Rule 11.02(4), under which money entrusted for a specific purpose, including advances for costs, must be applied only to that purpose and is not subject to counterclaim or setoff for fees, while allowing retention of property on which the lawyer has a valid lien or payment of agreed fees from proceeds. The committee noted the rule treats "retention" and "payment" separately and uses the more restrictive term "retention" only for a "valid" claim. It also cited DR 9-102(B), requiring prompt notice of receipt of client funds and prompt payment or delivery of funds the client is entitled to receive.

Adhering to prior Opinions 68-21 and 71-67, the committee reasoned that whether the attorney had a valid lien against the client's property is a question of law for the courts, not of ethics, and is not resolved merely by obtaining an earlier money judgment. The proper course would be to promptly file an action to establish a retaining lien or other entitlement, or pay the funds to the former client as demanded. The committee concluded that such trust funds may not be applied to the attorney's fee claim over the client's objection without prior court approval, and that retaining a portion in excess of what is needed to satisfy the obligation is not ethically proper.

Currency note

This opinion was issued in 1982, before The Florida Bar's adoption of the 2006 revisions to the 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 Treat this page as historical context, not current guidance.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: Can a lawyer apply trust funds held for another purpose to his unpaid fees?

A: The opinion concluded the lawyer may not, over the client's or former client's objection, apply such funds to a fee or cost claim or claimed lien without prior approval by a court.

Q: Does getting a money judgment change that?

A: The opinion concluded that obtaining an earlier money judgment does not resolve whether the lawyer has a valid lien against the client's property, which remains a question of law for the courts.

Q: Can the lawyer hold back more than the claim is worth?

A: The opinion concluded that, where the trust property is money or other readily divisible property, retaining an amount in excess of that needed to satisfy the obligation is not ethically proper.

Background and rules framework

The opinion interprets the duty to safeguard client funds under CPR DR 9-102(B) and former Integration Rule 11.02(4), which correspond to Model Rule 1.15 (safekeeping property). It treats the validity of any claimed lien as a legal question for the courts rather than an ethics question.

Citations and references

Rules of Professional Conduct:

• CPR DR 9-102(B) (Model Rule 1.15, safekeeping property)
• Integration Rule 11.02(4) (trust funds and fees)

Other opinions cited:

• Fla. Ethics Opinions 68-21 and 71-67 (validity of an attorney's lien is a question of law for the courts)

See also

• FL Bar Ethics Op. 87-12: No Retaining Lien on Funds for a Specific Purpose
• FL Bar Ethics Op. 88-11: Retaining Lien on the Case File for Unpaid Costs
• FL Bar Ethics Op. 02-4: Third-Party Claims on Settlement Funds

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-82-2/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-82-2-1.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 82-2
February 15, 1982
Advisory ethics opinions are not binding.

Funds received and held in trust by an attorney for some different purpose may not, over the client's or former client's objections, ethically be applied to the satisfaction of an attorney's claim, or claimed lien, for costs and fees without prior approval of the application by a court of competent jurisdiction. Further, if the property held in trust is money or other readily divisible property, the retention under claim of lien of an amount or portion in excess of that necessary to satisfy the obligation to the attorney is improper.

CPR: DR 9-102(B)
Integration Rule: 11.02(4)
Opinions: 68-21, 71-67

Chairman Ervin stated the opinion of the committee:

A Florida attorney holds in his trust account funds he had received from administration of an estate, which funds were owed by the estate to the attorney's former client. Upon receipt of the funds, the attorney requested authorization from his former client to apply a portion of said funds to unpaid attorney's fees and costs from the attorney's earlier, unrelated representation and advised the former client of his intent to place a "retaining lien" against the funds.

The former client refused authorization to so apply the funds and the attorney thereafter (apparently without reference to or assertion of a lien of any sort) sought and secured a default money judgment in small claims court against the former client for a specified amount of costs and attorney's fees.

The attorney inquires whether he may now ethically apply a portion of the sum he holds in trust to satisfaction of his judgment against his former client and remit the balance or, alternatively, whether he may direct the sheriff to levy on the funds he holds in his trust account.

Section 11.02(4) of the Integration Rule provides as follows, in pertinent part:

(4) Trust funds and fees. Money or other property entrusted to an attorney for a specific purpose, including advances for costs and expenses, is held in trust and must be applied only to that purpose. Money and other property of clients coming into the hands of an attorney are not subject to counterclaim or setoff for attorney fees, and a refusal to account for and deliver over such property and money upon demand shall be deemed a conversion. This is not to preclude the retention of money or other property upon which the lawyer has a valid lien for his services or to preclude the payment of agreed fees from the proceeds of transactions or collections. (Emphasis supplied.)

It is noted that the above-quoted section treats separately the instances where "retention" and "payment" are authorized, and uses the more restrictive term "retention" with reference to a "valid" claim.

In addition, DR 9-102(B) of the Florida Code of Professional Responsibility provides as follows, in pertinent part:

(B) A lawyer shall:

(1) Promptly notify a client of the receipt of his funds, securities, or other properties.

(4) Promptly pay or deliver to the client as requested by a client the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive.

In prior Advisory Opinions 68-21 and 71-67 this Committee expressed its opinion that the question of whether the attorney had a valid lien against a client's property coming into the attorney's hands was a question of law for the courts, not one of ethics subject to opinion by this Committee, which question is not fully resolved by the securing of an earlier money judgment against the client.

The Committee adheres to its prior opinions and the view stated therein. The proper procedure would be for the attorney to promptly file an action seeking establishment of a retaining lien or other entitlement as to the funds, or a portion thereof, or otherwise pay the sums to the former client as demanded. The Committee is of the opinion that funds received and held in trust by an attorney for some different purpose may not, over the client's or former client's objections, ethically be applied to satisfaction of an attorney's claim, or claimed lien, for costs and fees without prior approval of the application by a court of competent jurisdiction.

The Committee is of the further opinion that where the property held in trust is money or other readily divisible property, the retention under claim of lien of an amount or portion in excess of that necessary to satisfy the obligations to the attorney is not ethically proper.