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Last Post 20 Jun 2013 02:06 PM by  gtrachtenberg
R-11-0024 Ethical Rule 1.15 (“Safeguarding Property”) of Rule 42, Arizona Rules of the Supreme Court
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kk@risnerandgraham.com
Posts:

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07 May 2012 01:19 PM
Kenneth K. Graham
100N. Stone No. 901
Tucson Arizona 85701
(520) 622-7494
Fax - (520) 624-8853
kk@risnerandgraham.com
AZ Bar No. 007069

I would like to add my voice supporting this petition. As an attorney regularly representing claimants in personal injury cases, I am regularly faced with the problem of advising my clients about "lien" claims that are very questionable. Currently, I need to advise them that they either need to incur the expenses of filing a lawsuit against the person or entity making the questionable lien or allow me to negotiate a settlement of the questionable lien. Very often the person or entity asserting the questionable lien is willing to settle the claim for a very small percentage of the amount claim. It is my belief that they are willing to do so because they are aware that their claim is extremely questionable and they also know that the costs of filing suit to dispute they claimed "lien" is greater than the payment they are requesting, especially if one factors in attorney's fees. The current language of this rule essentially allows these questionable lien holders to extract a payment from my client because of the ethical position I face. The Rule change would alleviate this problem by allowing me to notify the lien claimant that I am aware of there claim, that I am holding money that they claim a right to a portion of, that I do not believe there claim is valid and that I will hold the amount they are claiming in my trust account for 30 days to allow them to pursue their claim. This Rule change would place the burden on the person or entity claiming the lien to then take action to enforce their claim to a portion of my client's recovery. This places the burden of filing a lawsuit where it belongs, the person or entity making the claim. This procedure protects the person or entity claiming the lien by allowing the opportunity to enforce their claimed "lien" should they want to do so.
elliotglicksman
Posts:

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07 May 2012 03:04 PM
Elliot Glicksman
State Bar number 6010
145 S. 6th Ave, Tucson, Arizona 85701
520-628-8878 phone
520-882-8618
elliot@glicksmanlaw.com


I strongly support the recommended change to ER 1.15, Petition R11-0024. The current Rule gives little ethical assistance to lawyers, and lacks certainty in timely resolution of meritless lien claims. In one case, a lien was asserted when the law clearly did not permit reimbursement to a health care provider. I asked the provider to confirm that they had no valid lien. Instead, they did nothing. They never agreed that their lien was invalid, but never pursued the lien. (I am convinced that they will never affirmatively put in writing an admission that their lien is invalid because unrepresented individuals and lawyers inexperience on lien claims continue to pay these meritless liens.) The present version of ER 1.15 gave me few options. Should we file a lawsuit, clog the court with more litigation and incur added costs. Alternatively, should I distribute the money and advise my client that the lien claim was frivolous. We chose the latter course, but my client is still left with the unsettling knowledge that the provider never agreed to drop their frivilous claim and, short of litigation, there was no way to force their hand.
Frank V
Posts:

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08 May 2012 02:03 PM
Frank Verderame
Plattner Verderame, P.C.
P.O.Box 36570
Phoenix, AZ 85067-6570
602-266-2002 (office)
602-266-6908 (fax)
fverderame@plattner-verderame.com
Bar Number: 007519

I concur with the others who have weighed in to support this rule change. There has been a need to address this issue for more than a decade now. Even when lawyers are trying to act as honorably as possible, the current rule places them in jeopardy of violation of the rule and in jeopardy of violating other rules of allegiance to the client. The Bar and the Court has never fully defined the term "matured legal and equitable claim."

The phrase originates from Professors Hazard and Hodes, who state that “the third party must have a matured legal or equitable claim, such as a lien on specific funds, in order to trigger the lawyer’s duty to hold the funds . . . pending resolution of the dispute.” Geoffrey C. Hazard, Jr. & W. William Hodes, The Law of Lawyering, §19.6 (3d ed. Supp. 2005-2). interestingly, this explanation comes from the commntators and is not found in any particular case that I could find nor is one cited by the Professors who authored the treatise.

The court has in the past had the opportunity to define this term, but has left the definition open to dispute. In my opinion, the source of difficulty with the current version of the rule. Failing to do that, the proposed change takes a large step in the right direction.
richardlangerman
Posts:

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08 May 2012 04:36 PM
Richard Langerman (009175)
Law Office of Richard Langerman
4506 N. 12th St.
Phoenix, Az. 85014
602-240-5525
richard@langermanlaw.com

I am a long time personal injury attorney. I write in support of the proposed amendment to ER 1.15.

Liens are a significant problem for Arizona personal injury litigants. While our civil justice system provides a remedy for people who have suffered personal injuries, too often the system is slow and inefficient. This delay is often compounded by the post-recovery resolution of liens.

Under the current formulation of Rule 1.15 personal injury claimants (and their attorneys)have the burden of "disproving" an invalid lien asserted against a personal injury recovery. The proposed amendment would shift the burden of establishing the validity of a lien to the person/entity asserting the lien. The proposed rule would create greater efficiency and fairness in the procedure for resolving lien disputes. By requiring the person/entity asserting the lien to timely establish his/her/its right to reimbursement, the proposed amendment would properly allocate the burden of proof and enhance the efficiency of the resolution of disputed liens without impairing the rights of lienholders.

I urge the court to adopt the proposed amendment.


josephatlaw
Posts:

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08 May 2012 06:58 PM
Joseph D'Aguanno
Harris Powers & Cunningham
361 E. Coronado Road, Suite 101
Phoenix, AZ 85004
602.271.9344 (p)
602.252.2099 (f)
jdaguanno@hpc-lawyers.com
State Bar No. 020421

I read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It outlines a major dilemma in personal injury lawsuits where the claimant is represented by counsel and proposes a fair solution. I encourage the Committee to adopt the proposed rule change.

As a plaintiff personal injury lawyer, I expend an enormous amount of time addressing lien assertions by third parties. Unfortunately, not all lien assertions have merit. In situations where there is a lack of merit, I am forced to hold my client's funds pending resolution with the unmeritorious lien claimant because of the fear that I will be accused of not properly fulfilling my ethical duty under Rule 1.15. Put another way, the client's money is held hostage because of my the ethical duty owed to lien claimants. The ethical duty owed to unmeritorious lien claimants, which is at odds with the duty owed to my clients, unnecessarily increases attorney's fees and costs associated with closing out a case and often significantly delays the process.

It is unfair to allow unmeritorious lien claimants to take advantage of my ethical duty with impunity. It is unfair to force an injury victim's attorney to file a lawsuit against the unmeritorious lien claimant to have the lien declared unenforceable or illegal. The burden should be on the lien claimant to prove the validity of the lien, not the other way around. The proposed rule change set forth by Mr. Trachtenberg and Mr. Abney seeks to equitably place the burden of proving a lien claim upon the lien claimant.

Frivolous lien claims are a huge drain on our resources. Providing a 30-day deadline for lien claimants to file an action to enforce their alleged liens should reduce the extortion our client's face, preserve the lien claimant's potential rights, and reduce the potential conflict between our duty to our client and our duty to unmeritorious lien claimants.

The proposed change to ER 1.15 should be adopted in full.

/s/ Joseph D'Aguanno
william.bacon
Posts:

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09 May 2012 01:03 PM

William C. Bacon
33 N. Stone Ave. 900
Tucson, AZ 85701
520-879-7165
520-620-3991(FAX)
wbacon@goldbergandosborne.com
State Bar No. 00485

I encourage the Committee to adopt the proposed change to ER 1.15.

The proposed rule addresses the all too common situation where purported lienholders can either indefinitely hold up a client's receiving a settlement or extort an improper payment from a client in need of funds.

It is only fair that the person/entity claiming a lien have the burden of proving it by pursuing an action to enforce the lien.

The proposed rule changes eliminates the dilemma attorneys now have of risking a bar complaint in order to do right by their clients. Attorneys should not be put in that positions.

I agree with the many comments previously submitted in support of this change.

The proposed change to ER 1.15 should be adopted in full.

William C. Bacon
ecrowley
Posts:

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09 May 2012 02:01 PM
Randall A. Hinsch
Plattner Verderame PC
P.O. Box 36570
Phoenix, AZ 85067-6570
(602)266-2002
FAX: (602)266-6908
rhinsch@plattner-verderame.com
Bar #: 010280

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It very eloquently and concisely outlines a major dilemma in personal injury lawsuits where the claimant is represented by counsel. I encourage the Committee to adopt the proposed rule change.

As a plaintiff personal injury lawyer, over the past few years I have been required to expend more and more of my time and client funds addressing lien assertions by third parties. Some of those lien assertions have merit. Unfortunately, many times they do not. In those situations where there is a lack of merit, because of the fear that the unmeritorious lien claimant may accuse me of not properly fulfilling my ethical duties under Rule 1.15, I am forced to withhold my client's funds pending some sort of resolution with the unmeritorious lien claimant. In other words, the client's money is oftentimes held hostage because of my ethical duties. Had my clients not retained an attorney, they would have immediate access to their funds.

Not only is it unfair to allow unmeritorious lien claimants to take advantage of my ethical duties with impunity , it is unfair to force an injury victim's attorney, i.e., me, to file a lawsuit against the unmeritorious lien claimant to have the lien declared unenforceable or illegal. That improperly places the burden to disprove the validity of the lien upon the injury victim, instead of the party claiming the unmeritorious lien. The burden should be on the lien claimant to prove that it has a right to the injury victim's funds.
Giving a lien claimant 30 days to file an action to enforce its alleged lien will stop unmeritorious lien claimants from extorting money from injury victim's, while preserving the lien claimant's right to pursue a lien in those instances where the lien claimant believes there is a material dispute to the propriety of the lien.

In conclusion, the proposed rule change set forth by Mr. Trachtenberg and Mr. Abney seeks to equitably place the burden of proving a lien claim upon the lien claimant. No longer will it be permissible for unmeritorious lien claimants to hold an injury victim's funds hostage because the injury victim retained counsel.

The proposed change to ER 1.15 should be adopted in full.
bdombrowski
Posts:

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09 May 2012 04:06 PM
Bonnie Dombrowski
Jacoby & Meyers Law Offices
2343 E. Broadway Ste 112
Tucson, Az. 85719
bdombrowski@jacoby-meyersaz.com
520-622-2350
520-622-4543 fax
SB# 011981


To Whom It May Concern:
I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It very eloquently and concisely outlines a major dilemma in personal injury lawsuits where the claimant is represented by counsel. I encourage the Committee to adopt the proposed rule change.

As a plaintiff personal injury lawyer, over the past few years I have been required to expend more and more of my time and client funds addressing lien assertions by third parties. Some of those lien assertions have merit. Unfortunately, many times they do not. In those situations where there is a lack of merit, because of the fear that the unmeritorious lien claimant may accuse me of not properly fulfilling my ethical duties under Rule 1.15, I am forced to withhold my client's funds pending some sort of resolution with the unmeritorious lien claimant. In other words, the client's money is oftentimes held hostage because of my ethical duties. Had my clients not retained an attorney, they would have immediate access to their funds.

Not only is it unfair to allow unmeritorious lien claimants to take advantage of my ethical duties with impunity , it is unfair to force an injury victim's attorney, i.e., me, to file a lawsuit against the unmeritorious lien claimant to have the lien declared unenforceable or illegal. That improperly places the burden to disprove the validity of the lien upon the injury victim, instead of the party claiming the unmeritorious lien. The burden should be on the lien claimant to prove that it has a right to the injury victim's funds.
Giving a lien claimant 30 days to file an action to enforce its alleged lien will stop unmeritorious lien claimants from extorting money from injury victim's, while preserving the lien claimant's right to pursue a lien in those instances where the lien claimant believes there is a material dispute to the propriety of the lien.

In conclusion, the proposed rule change set forth by Mr. Trachtenberg and Mr. Abney seeks to equitably place the burden of proving a lien claim upon the lien claimant. No longer will it be permissible for unmeritorious lien claimants to hold an injury victim's funds hostage because the injury victim retained counsel.
The proposed change to ER 1.15 should be adopted in full.

Thank you,
Bonnie Dombrowski
voightmann
Posts:

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09 May 2012 04:42 PM
Craigg Voightmann
The Voightmann Law Firm PC
16700 N. Thompson Peak Pkwy., Suite 110
Scottsdale, AZ 85260
cmv@voightmannlaw.com

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It very eloquently and concisely outlines a major dilemma in personal injury lawsuits where the claimant is represented by counsel. I encourage the Committee to adopt the proposed rule change.

As a plaintiff personal injury lawyer, over the past few years I have been required to expend more and more of my time and client funds addressing lien assertions by third parties. Some of those lien assertions have merit. Unfortunately, many times they do not. In those situations where there is a lack of merit, because of the fear that the unmeritorious lien claimant may accuse me of not properly fulfilling my ethical duties under Rule 1.15, I am forced to withhold my client's funds pending some sort of resolution with the unmeritorious lien claimant. In other words, the client's money is oftentimes held hostage because of my ethical duties. Had my clients not retained an attorney, they would have immediate access to their funds.

Not only is it unfair to allow unmeritorious lien claimants to take advantage of my ethical duties with impunity , it is unfair to force an injury victim's attorney, i.e., me, to file a lawsuit against the unmeritorious lien claimant to have the lien declared unenforceable or illegal. That improperly places the burden to disprove the validity of the lien upon the injury victim, instead of the party claiming the unmeritorious lien. The burden should be on the lien claimant to prove that it has a right to the injury victim's funds.

Giving a lien claimant 30 days to file an action to enforce its alleged lien will stop unmeritorious lien claimants from extorting money from injury victim's, while preserving the lien claimant's right to pursue a lien in those instances where the lien claimant believes there is a material dispute to the propriety of the lien.

In conclusion, the proposed rule change set forth by Mr. Trachtenberg and Mr. Abney seeks to equitably place the burden of proving a lien claim upon the lien claimant. No longer will it be permissible for unmeritorious lien claimants to hold an injury victim's funds hostage because the injury victim retained counsel.

The proposed change to ER 1.15 should be adopted in full.
RDBohm
Posts:

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09 May 2012 04:45 PM
Robert D. Bohm
2141 East Camelback Road
Suite 100
Phoenix, Arizona 85016
602-840-8787
602-840-0425 (Fax)
rbohm@bojolaw.com
State Bar #; 005226

The proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney deals with a major problem in personal injury lawsuits where the plaintiff is represented by counsel. I encourage the Committee to adopt the proposed rule change in its entirety.

As a Certified Specialist in Personal Injury and Wrongful Death Litigation, I am required to expend more and more of my time and, more importantly my client money, addressing reimbursement and lien assertions by third parties. Some of these assertions have merit, but unfortunately, many times they do not. Where there is a lack of merit, because of the fear that the unmeritorious lien claimant may accuse me of not properly fulfilling my ethical duties under Rule 1.15, I am forced to keep my client's money in trust will I try to resolve the unmeritorious claim. Had my clients not retained an attorney, they would have immediate access to their settlement.

Not only is it unfair to allow unmeritorious lien claimants to take advantage of my ethical duties with impunity , it is unfair to force the filing of a lawsuit against the unmeritorious lien claimant to have the lien declared unenforceable or illegal. That improperly places the burden of disproving the validity of the lien upon the victim, instead of the party claiming the unmeritorious lien. The burden should be on the lien claimant to prove that it has a right to the injury victim's funds.

Giving a lien claimant 30 days to file an action to enforce its alleged lien will stop unmeritorious lien claimants from extorting money from injury victim's, while preserving the lien claimant's right to pursue a lien when the lien claimant believes there is a real dispute to the validity of the lien.

The proposed rule change set forth by Mr. Trachtenberg and Mr. Abney seeks to place the burden of proving a lien claim where it belongs, on the lien claimant. No longer will unmeritorious lien claimants be able to hold an injury victim's money hostage just because the injury victim hired a lawyer.
The proposed change to ER 1.15 should be adopted in full.
John Gravina
Posts:

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10 May 2012 11:01 AM
John A. Gravina/013012
3546 N Euclid Ave
Tucson, AZ 85719
p.520.795.4330
f. 520.881.7689
e. John.Gravina@Azbar.org

Thank you for allowing comment to the proposed rule change to ER 1.15. This is a major problem. You should adopt the safe harbor rule change.

Creditors with an alleged lien / subrogation claim should not have the protection and power of the State Bar to do its collection work.

I would rather pay the ransom; or, my client pay the ransom. For e.g., an Erisa lien holder sells the collection file to an out of state collections firm. They write a series of threatening letters to the attorney. Now, they never provide the proof of their claim; just the threat of the State Bar.

This is very unfair. Unfortunately, I have had collections claim lien allegations and threaten bar complaints. This is money that could go to a consumer / accident victim. Otherwise, the State Bar conducts an investigation - so, a questionable claim gets paid and the Attorney is squeezed to do collection work.

Personally, I have seen these things blow up into investigations into other areas. For example, 3 way trust accounting, record keeping, etc. The bar gets to do some work; and, creditors squeeze money out of the attorney. All courtesy of the State Bar.

Please look at opposing comments skeptically - Why are they doing this? Who are they representing? The Public or Creditors? What do they stand to gain? Is this going to harm the public?

The proposed solution to a problem should be tried. If it fails, or there are unintended consequences, revisit it.

Again, thank you and the drafters of this sound change.

killelaw
Posts:

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10 May 2012 02:39 PM
Mark A. Kille
THE KILLE LAW FIRM, PLLC
7550 E. Addis Avenue
Prescott Valley, AZ 86314
P: 928.775.9398 F: 928.775.9817
Email: mark@killelaw.com
AZ Bar No. 024441


I devote 100% of my practice to representing victims of personal injury. Therefore, liens issues are an everyday issue. So is the application of ER 1.15. The following represents my full support of the proposed Comment to ER 1.15, and frustration with the current language of ER 1.15.

Today, the language of the current ER 1.15 is lacking in guidance, which provides an advantage to predator "lien" holders in the attempt to extort settlement funds from injury victims (which are my clients). Often times, I must must expend precious time challenging the validity of the "lien" with the opposition, all the while the funds are unavailable to my well-deserving client. Many times, to resolve the "lien" dispute, a nuisance settlement is reached, thereby depriving the injury victim from a portion of her settlement. The current version of ER 1.15 allows this scenario to be played out, time and time again, as a result of the current duty to hold settlement funds "until the claims are resolved." This period of time could be months after the personal injury settlement is achieved.

The Comment language proposed by Mr. Trachtenberg and Mr. Abney to be added to ER 1.15 will simply stop the unnecessary feuding and forced payouts. The 30 day window of opportunity will entitle the claimed lien holder to notice of the personal injury settlement. Then, in cases where the plaintiff's attorney and lien holder disagree as to the merits of the lien, the ball is in the court of the lien holder. Suit must be filed in 30 days to protect the interests of the alleged lien holder, or the lien claim is waived and the remainder of the settlement funds are dispersed to the injury victim. If an injury victim, through her counsel, disagrees with the merit of the "lien," why should it be the burden of the victim to file a dec action to force the claim to "resolve?"

The 30 day notice and opportunity proposed by Mr. Trachtenberg and Mr. Abney will put a stop to the abuse by lien holders, forcing them to file or remain silent (and waive the lien). I fully support this proposed language. MK
ilyalaw
Posts:

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10 May 2012 08:39 PM
Ilya E. Lerma, Esq.
TIDMORE LAW OFFICES L.L.P.
301 E. Bethany Home Road, Suite B-140
Phoenix, AZ 85012
602.264.1973
ilyalaw@hotmail.com

I am writing in support of the proposed amendment to ER 1.15, Petition R11-0024. Immediate consideration of this petition is urged in order to offer unambiguous ethical guidance to practitioners facing this issue on a daily basis.

The personal injury practitioner is bombarded with lien assertions in the vast majority of cases. The amount and entitlement of liens is a matter that can significantly delay a client's access to proceeds long after they have been paid. In a substantial number of cases, the liens are revealed to be wholly without merit and/or substantially incorrect regarding amount. Both situations serve to further disfavor the victim plaintiff who is denied access to funds, in many cases, when they are desperately needed. The proposed language is adequate to protect meritorious liens of those parties with a legitimate interest in recovery proceeds. The proposed language further provides guidance to the practitioner on how to navigate what are currently murky and treacherous ethical waters.

I support the timely adoption of this petition in full.

Robert Murphy
Posts:

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11 May 2012 12:18 PM
Robert S. Murphy
1650 N. 1st Ave., Phoenix AZ 85003
602 528 4728
fax: 866 224 2188
bob@rmurphylaw.com
Bar Number: 013620

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It very eloquently and concisely outlines a major dilemma in personal injury lawsuits where the claimant is represented by counsel. I encourage the Committee to adopt the proposed rule change.

As a plaintiff personal injury lawyer, over the past few years I have been required to expend more and more of my time and client funds addressing lien assertions by third parties. Some of those lien assertions have merit. Unfortunately, many times they do not. In those situations where there is a lack of merit, because of the fear that the unmeritorious lien claimant may accuse me of not properly fulfilling my ethical duties under Rule 1.15, I am forced to withhold my client's funds pending some sort of resolution with the unmeritorious lien claimant. In other words, the client's money is oftentimes held hostage because of my ethical duties. Had my clients not retained an attorney, they would have immediate access to their funds.

Not only is it unfair to allow unmeritorious lien claimants to take advantage of my ethical duties with impunity , it is unfair to force an injury victim's attorney, i.e., me, to file a lawsuit against the unmeritorious lien claimant to have the lien declared unenforceable or illegal. That improperly places the burden to disprove the validity of the lien upon the injury victim, instead of the party claiming the unmeritorious lien. The burden should be on the lien claimant to prove that it has a right to the injury victim's funds.
Giving a lien claimant 30 days to file an action to enforce its alleged lien will stop unmeritorious lien claimants from extorting money from injury victim's, while preserving the lien claimant's right to pursue a lien in those instances where the lien claimant believes there is a material dispute to the propriety of the lien.

In conclusion, the proposed rule change set forth by Mr. Trachtenberg and Mr. Abney seeks to equitably place the burden of proving a lien claim upon the lien claimant. No longer will it be permissible for unmeritorious lien claimants to hold an injury victim's funds hostage because the injury victim retained counsel.
The proposed change to ER 1.15 should be adopted in full.

awiggins
Posts:

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11 May 2012 06:41 PM
Anthony J. Wiggins
Wiggins Law Offices
7400 North Oracle Road, Suite 323
Tucson, Arizona 85704
520-623-3149
Fax: 520-219-9390
tony.wigginslaw@hotmail.com
State Bar No.: 010523

I write in support of the change to ER 1.15 proposed by Mr. Trachtenberg and Mr. Abney.

As a plaintiff's personal injury lawyer, I have seen a recent explosion in lien claims made by various entities against my clients' funds. Many of these "lien" claims are not supported by controlling law and, after research and consultation with colleagues, I believe are groundless. Yet ER 1.15 and its comment require me to hold the funds claimed by the "lienholder," even against my client's specific instructions, and to spend my clients' money to file suit to resolve these groundless claims. Some of these "lienholders" threaten suit to collect their claims, but when invited to file and told I am authorized to accept service for the client, they do not file suit -- in all likelihood because they understand they will not win if they file suit. Again, my clients and I bear the expense and risk to litigate with those lienholders who have unsupportable claims. With smaller "lien" claims, the clients are forced to pay a bounty to extinguish the "lien" claim, becasue litigation is too expensive. The present version of ER 1.15 effectively makes plaintiffs' personal injury lawyers tools used by unsrcupulous collection agents to extort money from the lawyers' clients.

The proposed amendment places the burden of proving such quesionable "lien" claims where it belongs, on the party making the claim. Permitting such claimants 30 days in which to file suit to enforce the claim provides more than adequate protection to the claimant in the event that the personal injury lawyer's analysis is flawed. It also allows injured clients access to their money in a predictable and safe process.

The proposed amendment does not change a lawyers' ethical duty to hold funds and resolve lien claims that are established by controlling federal or state law. Medicare, AHCCCS, Workers Compensation, properly filed and asserted health care provider liens, to name a few, are all recognized interests that would still be unethical to ignore or to attempt to resolve routinely with the 30 day letter proposed by the rule change.

The proposal resolves many cases of conflict between a lawyer's ethical duties and a client's rights where unsupportable "lien" claims are made to extort funds from injured clients. I urge the Arizona Supreme Court to approve the proposal.
dsethi
Posts:

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14 May 2012 01:11 PM
Dev Sethi
Kinerk Schmidt & Sethi, PLLC
1790 E. River Rd., #300
Tucson, AZ 85718
520-545-1663
dsethi@kss-law.com
www.kss-law.com

The proposed changes to ER 1.15 should be adopted as soon as possible.

I add my voice to the chorus of well-respected and experienced lawyers who have taken the time to review this petition and comment. Lawyers representing both plaintiffs and defendants have weighed in on the petition to change ER 1.15, and the comments have been unanimously in favor of making important revisions that will benefit clients.
I have represented both plaintiffs and defendants in tort cases since 1997. For the last 11 years, my practice has been limited to representing injured plaintiffs and their families. The problems created by ER 1.15 have complicated case resolution for the entirety of my career, and with a new cottage industry of lien revenue collections agents springing up, the problems are getting bigger and more troublesome. The time for action is now.
I will not repeat the sound rationale laid out in three pages of electronic comments. But I will draw attention to three key points.

1. The proposed petition does nothing to infringe or limit the legal rights of any stakeholder. Folks with valid lien claims will still have every right to assert their legal claim. Once properly asserted, that claim will be resolved.
2. The proposed petition removes uncertainty from the process. Clients -- on both sides of a dispute -- dislike uncertainly. This is especially true when a settlement has been reached. One of the key appeals of settlement is certainty. The current language of ER1.15 leaves lawyers and clients adrift in a sea of uncertainty with no clear answers and only peril.
3. The time for action is now. The petitioners have gone to great time and trouble to submit a carefully drafted proposal that addresses the current problems and creates a comprehensive new ethical rule. Many, many Arizona lawyers have taken time to weigh in with their own thoughts. Delay is unnecessary and unwise, and will only continue to frustrate clients, increase the time and expense necessary to resolve cases and leave attorneys (operating with the best of intentions) unsure of their obligations under the Rules.

I urge you to consider the petition, make any slight adjustments that may be necessary in your judgment based on the comments received, and adopt the core of the new rule as proposed.

Dev Sethi

Howard
Posts:

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15 May 2012 05:05 PM
SNYDER AND WENNER, P.C.
Attorneys at Law
Howard M. Snyder*
David A. Wenner
2200 E. Camelback Road, Suite 213
Phoenix, Arizona 85016
Telephone (602)224-0005
Facsimile (602)381-8997
www.snyderwenner.com
Howardlaw49@cox.net
*Also Admitted in Pennsylvania


May 15, 2012

Arizona Supreme Court
Clerk of the Supreme Court
1501 W. Washington Street
Room 402
Phoenix, AZ 85007

Re: Comment to Proposed Change to ER 1.15

Dear Justices:

The proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney concisely explains a major problem and dilemma in personal injury lawsuits when claimants are represented by an attorney. I encourage the Committee to adopt the proposed rule change.

Over the past few years, more and more time of personal injury attorneys is spent addressing lien claims made by third parties. Many such claims are improper attempts to take money from clients’ settlement proceeds with no factual or legal basis for doing so.

Attorneys fear that unmeritorious lien claimants may accuse them of not properly fulfilling their ethical duties under Rule 1.15, and are compelled to withhold client’s funds pending resolution with the unmeritorious lien claimant. In other words, the client’s money is often held hostage because of our ethical duties. Had the clients not retained an attorney, they would have immediate access to their funds.

It is fundamentally wrong that a person or company asserting a frivolous lien claim is in a better position, with more leverage, because the injury victim retained an attorney. It is unfair to allow unmeritorious lien claimants to take advantage of our ethical duties. It is also unfair to compel an injury victim’s attorney to file a lawsuit against unmeritorious lien claimants in order to have liens declared unenforceable or illegal. That unfairly and improperly places the burden to disprove the validity of the lien upon the injury victim. The party claiming the unmeritorious lien should have the burden to prove that it has a right to the injury victim’s funds.

Giving a lien claimant 30 days to file an action to enforce its alleged lien will stop unmeritorious lien claimants from extorting money from injury victims, while preserving the lien claimant’s right to pursue a lien in those instances where the lien clamant believes there is a legitimate legal and factual basis for its claim that a lien is appropriate.

In conclusion, the proposed rule change set forth by Mr. Trachtenberg and Mr. Abney seeks to equitably place the burden of proving a lien claim upon the lien claimant. No longer would it be permissible for unmeritorious lien claimants to hold an injury victim’s funds hostage just because the injury victim is represented by an attorney.

The proposed change to ER 1.15 should be adopted in full.

Very truly yours,

/s/

Howard M. Snyder
HMS:msc Arizona Bar No.006206

lkoschney
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17 May 2012 05:43 PM
Carl A. Piccarreta
State Bar #007151
Piccarreta Davis PC
145 S. Sixth Avenue
Tucson, AZ 85701
Ph: (520) 622-6900
Fax: (520) 622-0521
carlp@pd-law.com
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lkoschney
Posts:

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17 May 2012 05:51 PM
H. Michael Wright
Udall Shumway & Lyons
30 West First Street
Mesa, AZ 85201-6654
Ph: (480)461-5300
Fax: (480)833-9392
hmw@udallshumway.com
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mattmillea
Posts:

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21 May 2012 12:00 PM
Matthew P. Millea
2525 East Arizona Biltmore Circle, Suite 135
Phoenix, Arizona 85016
(602) 248-9107
Fax (602) 248-0971
matt@millealawfirm
Bar No. 011620

Clerk of Court
Arizona Supreme Court
1501 West Washington Street
Room 402
Phoenix, Arizona 85007

Dear Justices:
The petition filed by Mr. Trachtenberg and Mr. Abney to amend ER 1.15 should be adopted. The proposal addresses the potential for questionable personal injury lien claims to create a conflict of interest between the plaintiff's attorney and the plaintiff. As the petition sets forth, the rule generally requires the plaintiff's attorney to hold sufficient funds in trust to satisfy a lien. In the case of most liens, a settlement of the lien claim can be reached, and the client receives the balance from the trust account after payment of the lien. But the rule is generally interpreted as require the lawyer to file a declaratory judgement action if the lien dispute cannot be resolved. The funds must then be held in trust until the declaratory judgment matter is concluded. The problem is that ER 1.15 currently requires the lawyer to file such a declaratory action even in cases where the validity of the lien is questionable. The rule currently requires the lawyer to file the declaratory action even where the lawyer subjectively believes the lien is baseless. If there is any chance a court might disagree with the lawyer's judgment on the validity of the lien, the lawyer must file a declaratory judgment action. This is true even where the client needs the funds and does not want the lien paid. This creates an unnecessary conflict between attorney and client. And it puts the client at a disadvantage because they have hired a lawyer who is concerned about complying with the requirements of ER 1.15. A lien claimant should not be allowed to use the ethical duties of the lawyer to gain an advantage in asserting a lien of questionable validity. The petition provides a reasonable resolution to this common dilemma. The party seeking to collect a lien, who has notice that the lawyer holding the funds disputes the validity of the claim and intends to distribute the funds to the client, should bear the burden of invoking the court system. The burden should not be placed on the plaintiff's attorney.


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