Ezel / Ethics Opinions / MOLEC

What must a Missouri lawyer do when a client disputes an apparently valid lien against settlement funds?

Short answer The lawyer promptly distributes the undisputed amount, keeps the disputed amount in trust, and does not release it until the client-lienholder dispute is resolved. If necessary, the lawyer may ask a court to resolve the dispute.
Bar
MOLEC
Issued
2020

Apply this to your situation

This page answers the general question as of 2020. Ask about yours and see what the current Missouri Rules of Professional Conduct say for your facts, with citations.

Currency note: this opinion is from 2020
Subsequent statutory amendments, court decisions, or later opinions or rule amendments may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
How much weight this carries: Under Missouri Supreme Court Rule 5.30, formal opinions are binding; informal opinions are advisory. Source.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The lawyer holds settlement proceeds subject to an apparently valid lien, while the client directs the lawyer not to pay the lienholder.

Rule 4-1.15(e) and Comment [8] require prompt distribution of the portion in which no interest is disputed. The amount claimed by both client and lienholder stays in trust and cannot be distributed until their dispute is resolved.

If the parties cannot resolve it, the opinion permits the lawyer, when necessary, to file an action asking a court to decide the dispute.

In practice

Under this opinion, the client's instruction does not permit release of an apparently valid disputed lien amount. Only the disputed share remains frozen; the balance is paid promptly.

Common questions

Q: Must all settlement funds remain in trust?

A: No. The lawyer promptly distributes the undisputed portion.

Q: What happens to the lien amount?

A: It remains in trust until the client-lienholder dispute is resolved.

Q: May the lawyer follow the client's instruction not to pay and release the money to the client?

A: No. The opinion requires continued trust holding of the disputed amount.

Q: May the lawyer seek a court decision?

A: Yes, if necessary to resolve the dispute.

Background and rules framework

Rule 4-1.15(e) and Comment [8] separate prompt distribution of undisputed funds from continued safekeeping of an amount subject to an apparently valid competing claim.

Citations and references

Rules of Professional Conduct:

  • Missouri Rule 4-1.15(e) and Comment [8]

Other opinions cited:

  • Missouri Informal Opinions 970075 and 20000023

See also

Source

Original opinion text

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

QUESTION: What action should Attorney take when Attorney has notice of an apparently valid lien against settlement funds in Attorney’s trust account and Client directs Attorney not to pay the lienholder from the settlement funds?

ANSWER: Attorney should promptly distribute any funds in which the interests are not in dispute; hold the disputed funds in trust; refrain from distributing the disputed funds until the dispute between Client and the lienholder is resolved; and, if necessary, file an action to have a court resolve the dispute. Rule 4–1.15(e) and Comment [8]; see Informal Opinions 970075 and 20000023.

What do the rules say today, for your facts?

This opinion is from 2020. Ezel checks the current Missouri Rules of Professional Conduct against your situation and cites the rules it relies on.

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