Ezel / Ethics Opinions / VTBAR

Could counsel accept a replacement settlement check when the client refused to endorse the original?

Short answer Opinion 97-10 said counsel should not accept a substitute check payable to counsel as trustee while the client’s reason for objecting remained unknown. It did not reach the proposed distribution of the funds.
Bar
VTBAR
Issued
1997
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1997. Ask about yours and see what the current Vermont Rules of Professional Conduct say for your facts, with citations.

Disclaimer: Advisory only. Not binding precedent.
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 as a PDF) is the authoritative source for any reliance.
View original ethics opinion (PDF)

Plain-English summary

A personal-injury client had agreed to a settlement, but later refused to endorse the joint settlement check or speak with counsel. After fees and liens, the client would receive nothing. Counsel asked whether the insurer could instead issue a check to counsel as trustee for deposit and distribution.

The committee could not know whether the client disputed the settlement itself, counsel’s fee, or a lien. Taking the money could undermine an attempt to repudiate the settlement, while distributing it could prejudice an objection to the fee or liens. Without knowing the objection, counsel should neither accept nor distribute the proposed substitute payment.

The committee did not decide the distribution question because it rejected acceptance. It discussed possible withdrawal if counsel’s own fee was contested or the relationship otherwise became unreasonably difficult.

Currency note

This opinion was issued in 1997 under Vermont's former Code of Professional Responsibility. The Vermont Supreme Court's rules history says the Rules of Professional Conduct replaced the Code and applied to lawyer conduct after September 1, 1999; the court later made comprehensive amendments in 2009. 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 Treat this page as historical context, not current guidance.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.

Common questions

Q: Could counsel receive the substitute check as trustee?

A: No. The committee said not while the client’s objection remained unexplained.

Q: Did the committee decide whether counsel could pay fees and liens from it?

A: No. Having rejected acceptance of the substitute check, it did not reach distribution.

Q: Why did the client’s silence matter?

A: Counsel could not know whether the client challenged the settlement, the fee, or a lien, and different actions could prejudice those objections.

Background and rules framework

The opinion applied former DR 7-101 on lawful client objectives and discussed DR 5-101(A) and DR 2-110(C) as possible bases for withdrawal.

Citations and references

Vermont Code of Professional Responsibility:

  • DR 7-101; DR 5-101(A); DR 2-110(C).

Cases:

  • Valley Disposal, Inc. v. Central Vermont Solid Waste Management District, 113 F.3d 357 (2d Cir. 1997), cited in the discussion of a possible attorney's lien
  • In re Button v. Anderson, 112 Vt. 531 (1942), cited in the discussion of a possible attorney's lien
  • Hurlbert v. Brigham, 56 Vt. 368 (1881), cited in the discussion of a possible attorney's lien

Other opinion cited:

  • Vermont Professional Responsibility Opinion 85-4.

See also

Source

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