Can an Oregon lawyer endorse a settlement check that is payable jointly to the lawyer and the client?
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This page answers the general question as of 2005. Ezel answers yours: whether it's allowed on your facts, under the current Oregon Rules of Professional Conduct, with citations.
Plain-English summary
A client retains the lawyer in personal-injury litigation. Acting on the client's authority, the lawyer settles the case and receives a check from the defendant made payable jointly to the lawyer and the client. The opinion asks whether the lawyer may endorse the check on the client's behalf without authorization, and whether the lawyer may do so if granted authorization.
The opinion concludes no to the first and yes to the second. It applies Oregon RPC 1.2(a) and the principle that the lawyer-client relationship rests on the law of agency and the lawyer's fiduciary duty. A lawyer authorized by the client to negotiate a check on the client's behalf may do so; a lawyer not so authorized may not.
The opinion adds that, although authority to negotiate a check could theoretically be implied in specific or extreme circumstances involving haste, distance, inaccessibility of parties, and a course of dealing, those circumstances are rare.
In practice
The opinion holds that endorsing a client's check is an agency act that requires the client's authorization. Per the opinion, RPC 1.2(a) and the lawyer's fiduciary and agency duties permit a lawyer to negotiate a jointly payable check only with the client's authorization, and implied authority arises only in rare circumstances.
Common questions
Q: Can a lawyer sign the client's name on a settlement check without asking?
A: No. The opinion concludes a lawyer who has not been authorized by the client may not endorse the check on the client's behalf.
Q: Can a lawyer endorse the check if the client authorizes it?
A: Yes. The opinion concludes that a lawyer authorized by the client to negotiate the check may do so, because the relationship rests on the law of agency.
Q: Is the client's authorization ever implied?
A: Rarely. The opinion states authority to negotiate a check could be implied only in specific or extreme circumstances involving haste, distance, inaccessibility, and a course of dealing.
Background and rules framework
The opinion interprets Oregon RPC 1.2(a) (a lawyer shall abide by a client's decisions concerning the objectives of representation and the decision whether to settle), read with the agency and fiduciary principles underlying the lawyer-client relationship. RPC 1.2(a) tracks Model Rule 1.2(a).
Citations and references
Rules of Professional Conduct:
- Oregon RPC 1.2(a) / Model Rule 1.2(a) (scope; client decisions)
Cases:
- Application of Bernath, 327 Or 422, 962 P2d 685 (1998)
- In re Magar, 312 Or 139, 817 P2d 289 (1991)
- In re Boothe, 303 Or 643, 740 P2d 785 (1987)
See also
- OSB Ethics Op. 2005-18: Buying Up a Client's Bad Checks
- OSB Ethics Op. 2005-1: Withdrawal From Litigation for Unpaid Fees
Source
- Landing page: https://www.osbar.org/ethics/toc.html
- Original PDF: https://www.osbar.org/_docs/ethics/2005-26.pdf
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