Darren M. Clausen
The Moore Law Firm
Camp Lowell Corporate Center
4578 East Camp Lowell Drive
Tucson, AZ 85712
Ph: (520)327-7113
Fax: (520)327-3414

Richard S. Plattner
Plattner Verderame PC
P.O. Box 36570
Phoenix, AZ 85067-6570
[email protected]


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.

/s/ Richard S. Plattner

James E. Marner
Schultz&Rollins, LTD
1980 E. Fort Lowell Road
Suite 200
Tucson, AZ 85719
Ph: (520) 577-7777

Anthony J. Palumbo
Elliot G. Wolfe
Scott I. Palumbo
Palumbo Wolfe
2800 North Central Avenue
Suite 1400
Phoenix, AZ 85004
Ph: (602) 265-5777
Fax: (602) 265-7222

Nicholas A. Moceri
Nick Moceri, P.C.
122 North Cortez
Suite 220
Prescott, AZ 86301
Ph: (928) 778-2444
Fax: (928) 445-6515

Peter T. Donovan
16700 N. Thompson Peak Parkway
Scottsdale, AZ 85260
[email protected]

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It 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.

/s/ Peter T. Donovan

Kent Hammond
Law Offices of Rudolph & Hammond, LLC
8686 E. San Alberto Drive, Suite 200
Scottsdale, AZ 85258
Phone 480.951.9700
Fax 480.951.1185
[email protected]
State Bar # 015100

Christopher J. Curran
3165 S. Alma School Rd. Ste. 29-291
Chandler, AZ 85248-3764
480-649-1700
[email protected]

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney and support it in its entirety. As a practicing attorney in this State I can also from experience echo the sentiments of the attorneys who have already commented in support of the change. I would also add that the rule, [ER 1.15], in its current state has at least the potential for creating needless conflicts of interest between claimants and their attorneys thus warranting change.

For example, an attorney may be in receipt of both a client's funds and a demand for reimbursement, subrogation, or other demand for money based on the medical lien statutes in Title 33. If the attorney after good faith investigation and research has determined the demand is without merit s/he is left with limited options beyond requesting that the client permit the lawyer to file suit against the demanding party. If the client refuses to allow the suit the attorney would likely be required, not to unilaterally arbitrate the dispute which is specifically prohibited, but institute an interpleader action. If the same attorney is faced with a demand from the client for payment of the funds, the same limited options exist bu now possibly rising to the level of conflict even after the attorney making good faith investigation has determined the demand to be meritless. In this situation the attorney's interest in protecting his or her own "ethical hide" conflicts with the client's interests or instructions.

The proposed change allows these potential dilemmas to be averted while at the same time providing the lienholder a mechanism to protect its rights. The change also puts these ubiquitious lien issues right where they should be - in the context of law and equity - not attorney ethics.

Last, I believe it is important to note that these prolific lien issues are often handled in a professional and dignified way by a numer of firms and attorneys within our state and, at least in my experience with these firms, without attempts to use ER 1.15 in its current form as a lever between attorneys and clients. Unfortunately, these local firms and attorneys are not the only individuals engaged in subrogation and lien practice in Arizona. Armies of scoundrels from outside our state, many of whom are not attorneys constrained by out ethical rules and who do not adhere to any level of professionalism, have proliferated and barnacled themselves to personal injury settlements and other claims. These groups, while a disingenous as snakes, are not to be underestimated. They are smart and cunning and know how to read the rules governing lawyers. ER 1.15 in its current form provides them just the leverage they need while at the same time contstraining both the claimant and claimants' attorneys.

Liens should be about law and equity - not ethics. The proposed modification does nothing to lessen the burden on practioners to investigate claims and protect disputed funds. Indeed, it likely imposes a higher standard of care on the attorney coming into reciept of such funds. The proposed change should be adopted.

Page Chancellor Marks
Management Attorney
Goldberg & Osborne
33 N. Stone, Suite 900
Tucson, AZ 85718
[email protected]
520-909-0915
State Bar No. 014372

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. Messrs. Trachtenberg and Abney clearly outline the problems faced by personal injury counsel every day while resolving personal injury cases. I strongly encourage the Committee to adopt the proposed rule change.

I am a Management Attorney at Goldberg & Osborne. I oversee our offices and assist our attorneys with day to day issues in their files. As a result, I am faced with lien issues daily. I also routinely recieve questions from other attorneys on how to handle lien claims.

Clearly, all providers want to assert a lien, whether they are entitled to such a lien or not. In my opinion, many lien claims made do not have merit. In our practice, when a lien assertion is made, we have to stop everything to determine whether the provider has a meritous claim or not. When the case settles, we cannot finalize an accounting until the issue is resolved. Many times, we have to hold up paying the client their money until we can prove and get the provider to "agree" that they do not have a meritous lien claim. This resolution can hold up a client's money for months and sometimes years. If I was an unethical lawyer, then I could pay out the money and wait to see if the provider tried to pursue the matter. Furthermore, if the client was unrepresented, they would not be bound by the current 1.15 and could just deposit the money when paid.

This is clearly an unfair situation. The current situation also costs the injury victim more money. Under the current rule, if we cannot reach an agreement, we must file suit to resolve the issue. Then, the burden to disprove the validity of the lien is upon the injury victom. The burden should clearly be on the lien claimant to prove that it has a right to the injury victim's money.

Giving a lien claimant 30 days to file an action to enforce its alleged lien will stop unmeritorious lien claimants from unfairly taking money from injury victims, 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.

Daniel J. Adelman
Steven J. German
Scott B. Seymann
Mark E. Munson
Adelman German, PLC
8245 N. 85th Way
Scottsdale, AZ 85258
Ph: (480) 607-9166
Fax: (480) 607-9031
[email protected]

Mark D. Bradshaw
The Bradshaw Hogle Firm PLC
1013 S. Stapley Dr.
Mesa AZ 85204-5013
480-835-5553
[email protected]

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.

Sincerely,
Mark D. Bradshaw #007170

John Evans
6619 N. Scottsdale Rd.
Scottsdale, AZ 85250-4421
480-922-3676
[email protected]

I support the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney.

On a regular basis, our clients are being forced to pay “nuisance amounts” to purported lien holders who claim that they have a lien, but refuse to fully substantiate the lien. This is particularly true in the case of health insurers who claim to have an ERISA lien.

These “lien holders” threaten ethics complaints against attorneys to extort small amounts to satisfy their “liens.” Often, the amount of the “lien” is too small to justify the expense of an interpleader action. Further, many attorneys are afraid of ethics complaints, and the attorneys will advise their clients to “compromise” the liens, even though in many cases the liens are not valid. In many cases, the purpose of these “compromises” is more to protect the lawyer from an ethics complaint than to benefit the client.

Because of the current rule, the Bar is an unwitting facilitator of an insidious form of extortion from a large number of our clients of small amounts of money by purported “lien holders. “


The burden should be on the lien claimant to prove that it has a right to the injury victim's funds, and not on the injury victim to disprove the lien. 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 claimant believes there is a material dispute concerning the lien.

The proposed rule change by Mr. Trachtenberg and Mr. Abney strike a fair balance between lien claimants and injury victims. The proposed change to ER 1.15 should be adopted in full.

/s/John Evans

Eric C. Awerkamp
1930 S. Alma School Rd. Ste. A-115
Mesa, AZ 85210-3065
480-632-9800
[email protected]

The proposed change to ER 1.15 is needed. I encourage its adoption.

Unfortunately, in the past several years it has become common for entities to assert questionable and/or unmeritorious liens against a plaintiff's recovery for personal injuries. This requires plaintiff's counsel to hold the plaintiff's funds and spend a significant amount of time and effort to address the asserted liens. If a lien is meritorious, it is promptly paid. If not, the funds must still be retained until signfiicant time and effort is expended to resolve the lien. Plaintiffs in need of these funds are denied access until the unmeritorious lien is extinguished. Under Rule 1.15, I am required to hold these funds.

I agree with the comments of others that it is unfair to allow unmeritorious lien claimants to take advantage of my ethical duties with impunity. Currently, the burden of resolving the lien is improperly placed on the injured victim to pursue and extinguish the unmeritorious lien. The burden should be on the lien claimant.

I further agree that 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.

Sincerely,
Eric Awerkamp #012620

Gabriel D. Fernandez
437 W. Thurber Rd. #16
Tucson, AZ 85705
520-293-6255
Fax: 520-293-3937
[email protected]

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 for the following reasons.
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.

As noted above, unmeritorious lien claimants use our ethical obligations as a stick to beat us into submission. I have been threatened with a bar complaint by more than one lien claimant. The threat of a bar complaint, if I don't pay the lien in full, is a powerful tool to make any attorney submit to the will of a lien claimant. Moreover, as noted above, we must hold our client's money in trust, and expend more of our client's money in order to make the unmeritorious lien claimant go away. The burden should be on the lien claimant to prove that it has a right to the injury victim's funds, not the other way around.

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.

Bernard M. Rethore
Pfarr & Rethore, PC
5070 N. 40th Street, Ste. 230
Phoenix, AZ 85018
[email protected]

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It thoughtfully resolves a major challenge experienced in nearly every personal injury claim handled by my office. I encourage the Committee to adopt the proposed rule change.

As a plaintiff personal injury lawyer over the past twenty few years, I have been required to expend a great deal of time addressing bogus lien claims by third parties collection companies. Although some of these lien claims have merit, the majority do not. These bogus lien claims are tantamount to a “stick-up” of my client as these collection companies attempt to use our ethical duties under Rule 1.15 to the disadvantage of our clients. This is the exact opposite of what is intended by adherence to these rules. My client’s money should not be held hostage because of my ethical duties. Clients benefit from my representation. But, if they had not retained me they would have had immediate access to their funds. Why should anyone be at a disadvantage by simply retaining counsel to assist them?

Further, not only is it unfair to allow unmeritorious lien claimants to take advantage of my ethical duties with impunity, it is also 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. This improperly places the burden to disprove the validity of the lien upon the injury victim, instead of the party claiming the bogus lien. The burden should be on the lien claimant to prove that it has a right to the injury victim's funds not the other way around.

Finally, it seems reasonable to give a lien claimant 30 days to file an action to enforce its alleged lien. It 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. The proposed rule change set forth by Mr. Trachtenberg and Mr. Abney reasonably seeks to place the burden of proving a lien claim where it belongs on 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.

Shane L. Harward
Law Offices of Shane L. Harward, P.L.C.
10575 N. 114th Street, Suite 103
Scottsdale, Arizona 85259
Phone: 480.874.2918
Fax: 480.588.5063
[email protected]
State Bar No. 01532

I encourage the Committee to adopt the proposed rule change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. The reality is that the current ER 1.15 can literally place an attorney in a conflict of interest with his own client over a frivolous lien claim. It is common for alleged lien holders to use collection companies to re-victimize clients who have suffered injuries due to someone else's fault. These collection companies know about the current status of ER 1.15, and attempt to misuse it to their advantage. The client's own attorney is forced to withhold compensation until resolution of these alleged lien claims. The client wants his or her compensation. Compensation to which he or she has suffered and is entitled. In other words, the client's money is oftentimes held hostage by alleged lien claimants because of "ethical" duties. This places unnecessary stress on the attorney-client relationship. These collection companies, and the alleged lienholders, making the frivolous lien claim should have the burden to prove that they are entitled to the injury victim's fund. It is unfair to place this burden on the client and the client's attorney. Giving a lien claimant 30 days to file an action to enforce its alleged lien will stop frivolous lien claimants from extorting money from injury victim's and potentially do away with this cottage lien collection industry, while preserving the lien claimant's right to pursue a lien in those instances where the lien claimant believes there is a legitimate material dispute to the propriety of the lien. As stated by several of my colleagues, 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.

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

Edward C. Hopkins Jr.
Fisher Hopkins Nandan Pangalos PLLC
7700 E. Arapahoe Road, Suite 350
Centennial, CO 80112
(303) 779-5300 tel
(303) 779-5305 fax
[email protected]

I read the proposed change to ER 1.15 that Mr. Trachtenberg and Mr. Abney co-authored. It should be adopted in full.

Giving lien claimants 30 days to file actions to enforce their alleged liens will eliminate the unjust consequences of empowering lien claimants to hold attorneys' clients' funds hostage before they prove they are entitled to those funds. At the same time, it preserves lien claimants' rights to timely pursue their alleged liens. The proposed change to ER 1.15 seeks to equitably place the burden of proving and pursuing lien claims on lien claimants, where it belongs.

Sincerely,

Edward C. Hopkins Jr. #028825

Michael F. Magee
The Magee Law Firm, PLC
7411 E. Sixth Ave, Suite 106
Scottsdale, AZ 85251
[email protected]

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.

Lincoln Combs
Gallagher & Kennedy, P.A.
2575 E. Camelback Road
Phoenix, Arizona 85016
602-530-8022
[email protected]
State Bar No. 025080

The proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney should be adopted in full, and 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.

Lincoln Combs

Cole D. Sorenson, #013097
CANTOR LAW GROUP, PLLC
One East Washington St., Suite 1800
Phoenix, Arizona 85004
Telephone: (602) 254-8880
Facsimile: (602) 255-0815
Email: [email protected]


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.

Some lien claims boarder on the absurd. Yet the providers still assert them which leaves the lawyer in a very uncomfortable position: pay the lien and/or compromise the lien and/or expose your client to a later claim.

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 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.

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

Karl S. Pearson
PEARSON LAW, PLC
4422 N Civic Center Plaza Ste 101
Scottsdale, Arizona 85251
[email protected]
Bar No. 014594

The proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney should be adopted in full.

The current rule is being used by some as a means of "extorting" funds from our clients. we are currently obligated to retain our client's funds if someone is asserting a "lien" on the proceeds. In many situations, I am certain that the "lien" is without any merit, but I feel compelled to withhold my client's money as I do not want to run afoul of the current rule. Comment 4 to to the present rule refers to "matured, legal or equitable claims," but there is little guidance regarding what this means.

Accordingly, because lawyers do not want to be accused of "unilaterally" arbitrating the dispute, the clients funds are held hostage pending the resolution of the disputed claim. I have invited bogus lienholders to file suit, but they never do as they know they will lose. Instead, they threaten to file bar complaints if their bogus liens are not honored.

In such situations, clients can either choose to pay the lienholder some amount to release their funds, or file a lawsuit to determine the validity of the bogus lien. If a lawsuit is filed, the bogus lienholder will probably not even respond. However, the client will have to pay the filing fee and the cost of service. The funds will also be tied up for months until there is a ruling from the court.

The proposed rule change balances the competing interests. It allows a lien claimant ample time to file an action to enforce its alleged lien. It also allows the clients to have quicker access to their funds. The proposed rule change will help eliminate extortionate practices and promote fairness.

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

Ryan Skiver
Warnock MacKinlay & Carman, PLLC
7135 E. Camelback Rd., Suite F240
Scottsdale, AZ 85251
602.381.6626 (P)
602.381.6560 (F)
[email protected]
AZ Bar #024552

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It sets forth a very real problem that personal injury lawyers must deal with repeatedly. I encourage the Committee to adopt the proposed rule change.

As a plaintiff's personal injury lawyer, we are required to expend more and more of our time and clients' funds addressing lien assertions by third parties. While some of those lien assertions have merit, 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.

Sincerely,
/s/ Ryan Skiver

Craig J. Simon
Simon Law Group, PLLC
2141 East Broadway Road, Suite 113
Tempe, AZ 85282
Ph: (480)745-2450
Fax: (480)745-2454

Nicholas Moceri
Nick Moceri, P.C.
122 N. Cortez, suite 220
Prescott, AZ 86301
928-778-2444
Fax 928-445-6515
email [email protected]
Bar No. 006038

I write in support of the proposed rule change. My thoughts are in line with Mr. Trachtenberg, Mr. Abney and many others.
The attorneys I am familiar with do their best to protect the interests of legitimate lienholders. There are, however, other lien claimants with claims that are more questionable (or downright invalid) that need to be dealt with. The proposed rule would put the burden of going forward and the burden of proof where it belongs, on the lien claimant.
Many of the persons we have deal with in these situations are professional collection agents. USA Today in this morning's edition had a front page headline about collection agents becoming more aggressive with debtors and crossing the line due to the tough economic times. There is no exception for clients of Plaintiffs' lawyers, and the current rule puts the collector in an even stronger position than if there were no attorney involved. The current rule allows the lien claimant to force the Plaintiffs' lawyer to hold the client's money hostage, thereby depriving the client of the client's funds and driving a wedge between client and attorney.
The proposed change would strike a good balance of competing interests. I urge its adoption.
Nick Moceri

Brian Allen
Udall, Shumway & Lyons, PLC
30 West First Street
Mesa, AZ 85201
(480) 461-5335
[email protected]
Bar #17102

I support the proposed rule change. The issue involved in this proposed rule change is one of fairness. If a third party claims an interest in a claimant's settlement proceeds, the third party should act to protect that interest. This is what the rule change requires. That's fair.

Lynn Eric Goar
1955 W. Grant Rd., Ste. 125
Tucson, AZ 85745-1481
520-740-1447
[email protected]

I strongly support the proposed amendment to Ethical Rule 1.15. Without repeating all of the previous comments in support of this amendment, I would like to state that the current rule unfairly burdens my clients and my practice. Should a party or entity have a legitimate claim to a client's recovery, the burden should be on them to assert it in a timely fashion rather than forcing my client to prove it is invalid. The proposed amendment still provides needed protections for valid liens without unfairly burdening the claimants or their attorneys.

Steven J. Bruzonsky
1152 E. Greenway, Suite 5
Mesa, AZ 85203
Phone: 480-969-3003
Fax: 480-962-5879
E-mail: [email protected]

I essentially agree with the proposed change to Comment 4 to Ethical Rule 1.15, though I recommend a bit of revision to the proposed change for the reasons which I discuss below.

Liens and subrogation rights are perhaps the most complex and misunderstood topic in all of personal injury law. Please visit my website at www.stevenbruzonsky.com for a lot of information regarding many different types of liens. In addition to my personal injury practice,, I also handle complex lien situations in personal injury, medical malpractice and wrongful death cases for other Arizona attorneys representing injured claimants on a hourly rate basis. Please visit my website for (1) my “Liens Corner” articles on various injury lien subjects published in the monthly Arizona Association of Justice/Arizona Trial Lawyers Association (AAJ/AzTLA) publication “The Advocate” since 2006; (2) for my experience as Faculty and speaker for Continuing Legal Education seminars several times annually on lien related topics for various legal organizations including State Bar of Arizona, AAJ/AzTLA and Arizona Paralegal Association; and (3) for examples of complex lien situations that I have successfully resolved. I am also the Author (four chapters) and Associate Editor, "Arizona Personal Injury Lien Law and Practice", published by the AAJ/AzTLA (2006 with 2007 supplement).

1. The Problem:

My experience is that all too often, lien/subrogation claimants and/or their collection companies do not do their homework to ensure that they have a valid basis to collect their lien/subrogation interest, prior to asserting their lien/subrogation rights. Frankly, for the most part, they do not care about the legal basis, they care about how much they can collect. Most lien/subrogation interests are handled or collected by collection or subrogation companies, which are typically paid on a percentage basis of the amount collected.

During the past several years alone, subrogation/lien claimants have refused to withdraw lien claims which are in my opinion and expertise clearly or most probably invalid, yet when given repeated deadlines to file litigation (or otherwise settlement funds held in Trust would be disbursed without regard to the invalid lien claim), these subrogation/lien claimants failed to follow through to file litigation to protect their interest.

The most egregarious example of this are FEHBA healthplan lien claims, as it is 100% clear that there are no lawfully enforceable FEHBA healthplan lien claims in Arizona. Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006) holds that there is no federal jurisdiction, no federal question presented, and no federal preemption of state anti-subrogation law for a Federal Employee Health Benefits Plan subrogation/lien presented, and that the claim must be litigated in state court subject to state law. So Arizona anti-subrogation case law clearly applies to any FEHBA lien claim. (Ethics Opinion 97-02, which advised that an FEHBA lien claim was required to be protected per ER 1.15, was based on the inquiring attorney’s statement that in his opinion the lien claim was valid, and was issued prior to the McVeigh U.S. Supreme Court decision discussed above.) However, lien collection companies for FEHBA healthplan lien claims, such as Rawlings for the Aetna FEHBA healthplan, regularly continue to claim liens and NEVER agree to drop their lien claims, preferring to use ER 1.15 to hold hostage the settlement funds unless and until the Plaintiff attorney agrees to some sort of monetary settlement. In such cases, I have generally given the FEHBA lien collection company multiple deadlines to file litigation, with litigation never being filed. In one case that I am currently handling on behalf of a local law firm, with a $320,000 FEHBA lien claim, a local Phoenix attorney representing Rawlings states in letters that “we will not hesitate to assert all legal rights and seek all remedies against your client available in law and in equity”, and that “you - - - may not distribute settlement proceeds until our lien is satisfied and paid in full” , clearly giving the inference of a threat to report the Plaintiff attorneys to the local bar for violation of ER 1.15.” Yet they have missed filing litigation on multiple deadlines and they also haven’t reported any ER 1.15 violation to the bar.

2. The Proposed Solution:

Attorneys Trachtenberg and Abney have proposed an excellent solution to this dilemma. However, I believe that their proposed change to Comment 4 to Ethical Rule 1.15 should be revised a bit.

As proposed, the amended comment may be interpreted to mean that a plaintiff’s attorney may simply give this certified mail thirty (30) day notice to any lien claimant, and if litigation isn’t filed within that deadline, then the plaintiff’s attorney may disburse settlement funds without regard to the lien claim. I do not believe that this is the intent of attorneys Trachtenberg and Abney. My understanding of their intent is that when there are substantial grounds for dispute as to the person entitled to the funds, that the plaintiff’s attorney may give this certified mail thirty (30) day notice. So if there are not “substantial grounds for dispute”, such as when the lien rights are reasonably established, then the plaintiff attorney can not utilize this certified mail thirty (30) day notice to avoid ER 1.15 ethical responsibity. For example, Medicare liens generally do not have any “substantial grounds for dispute” of the subrogation/lien right itself.

Also, I recommend a sixty (60) day notice, as this will give subrogation/lien collection companies and/or the subrogation/lien claimants more adequate time to refer the matter first to their own in house legal counsel, and then for referral to local Arizona counsel for litigation if they deem this appropriate. Too short of a notice period could result in the plaintiff attorney having disbursed all settlement funds without regard to the lien claim, yet the matter still gets referred to local Arizona counsel with litigation filed against the injury client.

3. My Recommended Amendment to the Comments:

[Additions to Comment 4 to Ethical Rule 1.15 (“Safeguarding Property”) of
Rule 42, Arizona Rules of the Supreme Court, by attorney Steven J.
Bruzonsky, are shown in bold print.]

The Rule also recognizes that third parties may have just claims against specific funds or other property in a lawyer's custody, such as a client's creditor who has a lien on funds recovered in a personal injury action. A lawyer may have a duty under applicable law to protect such third-party claims against wrongful interference by the client. In such cases, when the third-party claim has become a matured legal or equitable claim, the lawyer must refuse to surrender the property to the client until the claims are resolved. A lawyer should not unilaterally assume to arbitrate a dispute between the client and the third party, but, when there are substantial grounds for dispute as to the person entitled to the funds, the lawyer may file an action to have a court resolve the dispute. In the alternative, when there are substantial grounds for dispute as to the person entitled to the funds, the lawyer’s ethical duties under Rule 1.15(e) shall be satisfied (1) if the lawyer files an action to have a court resolve the dispute, placing the disputed funds in Trust pending court resolution of the dispute, or (2) alternatively, if the lawyer provides sixty (60) calendar days written notice, by certified mail, to the third-party. The written notice must state that the disputed funds will be held in Trust for those sixty (60) calendar days; that if the third party does not file an action to determine the third party’s lien or subrogation rights within those sixty (60) calendar days, then the disputed funds will be released immediately thereafter to the lawyer’s client; and that if the third party files the action to determine the third party’s lien or subrogation rights within those sixty (60) calendar days, then the lawyer will continue to hold the disputed funds in Trust pending resolution of the dispute.

Sara Siesco
Bohm & Jones, P.C.
2141 E. Camelback Road, Suite 100
Phoenix, Arizona 85016
602-840-8787
[email protected]
State Bar No. 0257803

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.

Sara Siesco

JoJene Mills, P.C.
1670 East River Road, Suite 270
Tucson, AZ 85718-5834
Ph: 520-529-3200
Fax: 520-529-3113

John P. Torgenson, Esq.
Stephen D. Benedetto, Esq.
Julia S. Acken, Esq.
Jordan A. Smith, Esq.
Benedetto Torgenson, PLC
The Phoenix Plaza
2901 N. Central Avenue, Suite 200
Phoenix, AZ 85012
Ph: 602-759-0012
Fax: 602-513-7066

Louis T. Seletos
Farley, Seletos & Choate
Staff Counsel Farmers Insurance
2400 W. Dunlap Ave, Suite 305
Phoenix AZ 85021
602-395-2040
State Bar Number 009562
[email protected]

I am a personal injury defense attorney and I agree with the proposed changes to this rule. The law should strive for both a fair resolution and certainty. Currently, the rule only serves to prolong the resolution of a matter often to the detriment of the client. The proposed change provides a mechanisim for valid liens to be asserted and enforced and brings the matter to a conclusion.

I support the proposed change to Rule 1.15 as the 30 days to file an action will ensure that alleged liens are dealt with properly and it equally stops the unnecessary delay for the injured person from receiving their settlement money. This is a common problem in my personal injury practice and as the rule currently stands plaintiffs and their lawyers are at the mercy of any lien claimant who may never respond to our numerous requests for lien information or payment compromises. Therefore, the money sits in trust for years just waiting for a response while countless hours of calls and follow-up letters are wasted on a lien claimant that is not interested in returning a phone call. I support this change and see it as necessary. Please adopt it in full.
Thank you.

Krista Carman
246 S. Cortez St
Prescott, AZ
86303
[email protected]
928-445-8056
State Bar No. 021700

John A. Furlong, Bar No. 018356
General Counsel
State Bar of Arizona
4201 North 24th Street, Suite 100
Phoenix, Arizona 85016-6266
602.252.4804
[email protected]

Christopher J.Zachar,Esq.
3301 East Thunderbird Road
Phoenix, Arizona 85032
Ph: 602-494-4800 Fax: 602-494-3320
[email protected]


I have read with great interest the submission by Mr. Trachtenberg and Mr. Abney. I have also read many of the comments submitted by Arizona counsel.

It is my opinion that this amendment to Rule ER 1.15 is very much needed.

I have been practicing in the area of personal injury law for 20 years in Arizona. Over that time, the application of ER 1.15 has evolved, and become even more important in the day to day practice of personal injury attorneys. It seems that everyday we are in process of receiving and evaluating lien claims, and explaining the issues to our clients. In the same discussion we explain exactly "who is the client" and to whom we owe legal duties of due care. While we belive that we understand these issues, the truth is that lien "claimants" are often able to hold a client's recovery "hostage" with a mere allegation that they have a claim, irregardless of merit. Often these disputes drag on for months. There must be a better way and clearly, as the one asserting a lien claim, the lien claimant must bear the burden of proving entitlement--not the other way around. A mere allegation of a claim should not be able to hold "hostage" a client's recovery for any excessive duration. Limits must be imposed.

As I understand the Petition, the request is made to place the burden of proof upon the lien claimant and establish a time frame for determination. In fairness to our clients, the victims, ER 1.15 must be amended in this regard. A 30 day window as described by my colleagues is most fair and appropriate in this instance.

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

Brian Warnock
Warnock, MacKinlay& Carman
7135E Camelback Rd Ste F240
Scottsdale AZ 85251
602-381-6669
[email protected]
Bar # 012400

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It very appropriately addresses 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 our firm has been required to expend more and more time and client funds addressing lien assertions by third parties. Very few of those lien assertions have merit. Where there is a lack of merit, because of the fear that the unmeritorious lien claimant may accuse us of breaching ethical duties under Rule 1.15, we must withhold 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 our ethical duties. Had our 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 our ethical duties 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. 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 rightfully 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.

Amy Langerman
Law Office of Amy Langerman
951 Coronado Avenue
Coronado, CA 92118
619-437-4579
[email protected]

Dear Justices:

I write in support of the petition to amend ER 1.15 filed by Geoffrey Tractenberg and David Abney. While I reside in California presently, I am an attorney, licensed to practice law in the State of Arizona and continue to practice in Arizona (state and federal courts) as well as the Office of Administrative Hearings. While the scope of my practice has changed over the years, for the first 20 years of my practice, I was an attorney handling personal injury, medical malpractice and employment discrimination cases, many of which involved claims for injuries resulting in medical expenses for which some third party claimed some kind of lien. While initially, those liens were handled swiftly and efficiently under Arizona common law that prohibited assignments of personal injury claims and effectively outlawed third party lien claims, over the years, federal and state law changed and lien claims became a veritable cottage industry for collection agencies and their attorneys. The victim of this industry was the injured claimant, who already having suffered at the hands of a tortfeasor, now suffered even more, at the greedy hands of third parties and their administrators, adjusters and most commonly, assignees, who sought to profit by making spurious claims that were too costly for the victims to fight. The lawyer who was trying to pursue justice for the victim, and had successfully negotiated a fair resolution (or obtained a verdict), now was forced to hold his or her client’s recovery in a bank while some third party held it hostage. Strong words? You bet! The rule change here is designed to deal with a significant loophole that allows for abuse of victims through delay, recalcitrance, and sometimes, extortion.

The most common problem that I faced was recalcitrance and delay. I echo the experiences of Jojene Mills, my former associate, who explained a recent experience she had, just trying to get someone to even respond. My office would write and call and email and would be met with silence. Sometimes we could reach someone who understood what we needed; often, we would get a person answering a phone who was clueless. We would try to get documents to which an injured person was entitled (e.g. plan documents to support a claimed lien, an itemized bill to see if the lienholder was charging only reasonable and necessary expenses and not $30.00 for one Tylenol tablet) and would be met with silence. We would try to get an affirmation of the actual amount claimed to be owing and the statutory or legal basis to support such a claim and would be get nothing other than a copy of the demand for payment/claim. As an attorney working on a contingency fee, I got nothing more for handling a lien dispute; my fee was a percentage of the recovery. I was trying to resolve a disputed claim to the client’s share of the recovery, a claim that often was without legal basis under Arizona or federal law. Ethically, I could not distribute the funds to my client even when the law was clear that the lienholder had no valid claim. I remember years ago calling the State Bar Ethics hotline and asking if I had to succumb to the extortion of a lienholder making a legally unsupportable claim (e.g. a lienholder claimed they were entitled to be paid when the law made clear they had no lien) and I was told that if the lienholder made a claim, no matter how spurious, I could not disburse the funds unless I was willing to be on the hook for any lawsuit that the lienholder then wanted to file, something my malpractice carrier would likely not have defended or paid. Unscrupulous lien holders could assert a claim, force me to hold the funds hostage and then would do nothing hoping that the injured client would finally give in and pay something. It would be too costly (emotionally and often economically) to file yet another claim, in an overworked court system, seeking a declaratory judgment over who owed what to whom.

The proposal before the court hurts NO VALID lien holder or, for that matter, a third party who seeks to make a claim to funds, even if spurious. It recognizes that if a lienholder is trying to make a claim for property (in this instance, a personal injury recovery), they would have the burden to establish their entitlement and the amount of their entitlement. What this does is mandate that they act timely and reasonably to pursue their rights and that THEY pursue them. Most of these lienholders had no problem filing a claim shortly after the services were provided as they are required to do to perfect the claim; once filed, they feel they are protected, regardless of the legal validity of their filing. If their claim is valid, they have an incentive to act promptly upon notice of a settlement because the plaintiff’s attorney knows that the claim must be paid, knows the law on compromise, and most of those claims will be resolved informally. But, if there is no valid basis for the claim, but the lienholder has filed a claim nonetheless, why should they be allowed to sit back, ignore legitimate inquiry for substantiation (factual and legal) of the asserted claim rights, and when the claim is settled, continue in obstructionist tactics hoping to get something by wearing down the victim even further. Why should the victim have to file some sort of declaratory action when the lienholder otherwise would have to prove up their claim anyway. If a lienholder wants to make claim to someone else’s personal injury recovery, the lienholder should be given notice of the intent to distribute as proposed by the Tractenberg/Abney amendment and then 30 days to act on their legal rights or waive them. It is a fair compromise that hurts no one that is acting in good faith.

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

Amy Hernandez
Piccarreta Davis PC
145 S. 6th Avenue
Tucson, Arizona 85701
520-622-6900 phone
520-622-0521 fax
[email protected]
022892

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It 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.

Mark P. Breyer
Breyer Law Offices, P.C.
15715 S 46th Street, Suite 100
Phoenix, AZ 85048
(480) 505-2160
(480) 496-7311 fax
[email protected]
State of Arizona Bar No. 016862

Without repeating the comments of others, I would like to start with a proposition that would appear obvious from the submissions thus far: monies due to injured Arizona plaintiffs are being withheld as a result of lien claims that are sometimes unfounded. Under the current ethical rules, an attorney representing someone who is owed money is sometimes placed in the position of withholding funds even if there is no legitimate, valid lien. Thus, there must be a mechanism to allow attorneys to ethically represent their clients without unnecessary delay or unfair risks being placed upon the attorneys. At the same time, any ethical rule change must ensure that an attorney may not ignore the rights of lienholders with valid claims. The rule change proposed by Mr. Abney and Mr. Trachtenberg ensure the rights of valid lienholders will be protected, while at the same time minimizing unfair and undue delay to the rights of clients who hired Arizona counsel. Other than one small change, I support the proposal in its entirety.

It is worth noting that the rule change will have little impact on valid lienholders that exercise their lien rights with due diligence. Attorneys representing injured clients will still have significant disincentive to disbursing funds when a valid lien exists. Lienholders that choose to protect their rights still have the opportunity to do so and nothing in the proposal divests a valid lienholder of its right to pursue such a claim. Conversely, those who would like to take advantage of claimants by alleging liens that are known to be unsupportable under current Arizona law will be forced to stop bilking those who have been injured from money that should belong to the victim.

At the crux of the matter, I would echo the statements of Amy Langerman, above, "The proposal before the court hurts NO VALID lien holder or, for that matter, a third party who seeks to make a claim to funds, even if spurious. It recognizes that if a lienholder is trying to make a claim for property (in this instance, a personal injury recovery), they would have the burden to establish their entitlement and the amount of their entitlement. What this does is mandate that they act timely and reasonably to pursue their rights and that THEY pursue them. Most of these lienholders had no problem filing a claim shortly after the services were provided as they are required to do to perfect the claim; once filed, they feel they are protected, regardless of the legal validity of their filing. If their claim is valid, they have an incentive to act promptly upon notice of a settlement because the plaintiff’s attorney knows that the claim must be paid, knows the law on compromise, and most of those claims will be resolved informally."

The proposed change to ER 1.15 should be adopted in full with one exception. In recognizing the importance of protecting the rights of purported claimants, I would propose a 45 day time period after sending the initial letter. While this does slow the final recovery to the plaintiff, it virtually eliminates any lienholder from being forced to respond to the certified letter so quickly that it loses out on valid lien rights. While 30 days is probably more than sufficient, those extra 15 days - 45 days total - would eliminate any potential prejudice to a lienholder with a valid claim under almost any conceivable circumstance. Anything longer than 45 days becomes an unnecessary delay placed upon the injured client.

Thomas G. Kelly, III
Law Office of Thomas G. Kelly, III
201 W. 2nd St.
Yuma, Az 85364
928 376-0794 (p)
928 376-0795 (f)
[email protected]
AZ Bar #004703

I have read the proposed change to ER 1.15 and wholeheartedly support the Rule change.

I have practiced personal injury law for most of my 35 + years as a member of the Az State Bar. Over the past few years, the number of entities claiming a right to reimbursement out of a personal injury settlements/verdicts has grown astronomically. Many of these entities are represented by companies that can only be described as bill collectors. Their motivation is to obtain reimbursement for their masters, whether or not they are entitled to such reimbursement, because their compensation is based upon their success of their collection efforts. This scenario places the Attorney in the ethical dilemma of paying his client while risking a Bar complaint or holding the client's money hostage to a claim of reimbursement which may not be meritorious. It is unfair to place an attorney and his/her client in such an ethical/personal quandry.

Allowing the claimaint 30 days to file an action to enforce its purported claim is fair and will stop claims that are without merit while preserving the lien claimaint's rights.

In summary, the proposed Rule change protects the interests of lien holders and also eliminates improper collection practices against injured parties.

The change to ER 1.15 should be adopted as proposed.

Kenneth K. Graham
100N. Stone No. 901
Tucson Arizona 85701
(520) 622-7494
Fax - (520) 624-8853
[email protected]
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.

Elliot Glicksman
State Bar number 6010
145 S. 6th Ave, Tucson, Arizona 85701
520-628-8878 phone
520-882-8618
[email protected]


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 Verderame
Plattner Verderame, P.C.
P.O.Box 36570
Phoenix, AZ 85067-6570
602-266-2002 (office)
602-266-6908 (fax)
[email protected]
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.

Richard Langerman (009175)
Law Office of Richard Langerman
4506 N. 12th St.
Phoenix, Az. 85014
602-240-5525
[email protected]

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.

Joseph D'Aguanno
Harris Powers & Cunningham
361 E. Coronado Road, Suite 101
Phoenix, AZ 85004
602.271.9344 (p)
602.252.2099 (f)
[email protected]
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 C. Bacon
33 N. Stone Ave. 900
Tucson, AZ 85701
520-879-7165
520-620-3991(FAX)
[email protected]
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

Randall A. Hinsch
Plattner Verderame PC
P.O. Box 36570
Phoenix, AZ 85067-6570
(602)266-2002
FAX: (602)266-6908
[email protected]
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.

Bonnie Dombrowski
Jacoby & Meyers Law Offices
2343 E. Broadway Ste 112
Tucson, Az. 85719
[email protected]
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

Craigg Voightmann
The Voightmann Law Firm PC
16700 N. Thompson Peak Pkwy., Suite 110
Scottsdale, AZ 85260
[email protected]

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.

Robert D. Bohm
2141 East Camelback Road
Suite 100
Phoenix, Arizona 85016
602-840-8787
602-840-0425 (Fax)
[email protected]
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 A. Gravina/013012
3546 N Euclid Ave
Tucson, AZ 85719
p.520.795.4330
f. 520.881.7689
e. [email protected]

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.

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: [email protected]
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

Ilya E. Lerma, Esq.
TIDMORE LAW OFFICES L.L.P.
301 E. Bethany Home Road, Suite B-140
Phoenix, AZ 85012
602.264.1973
[email protected]

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 S. Murphy
1650 N. 1st Ave., Phoenix AZ 85003
602 528 4728
fax: 866 224 2188
[email protected]
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.

Anthony J. Wiggins
Wiggins Law Offices
7400 North Oracle Road, Suite 323
Tucson, Arizona 85704
520-623-3149
Fax: 520-219-9390
[email protected]
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.

Dev Sethi
Kinerk Schmidt & Sethi, PLLC
1790 E. River Rd., #300
Tucson, AZ 85718
520-545-1663
[email protected]
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

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
[email protected]
*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

Carl A. Piccarreta
State Bar #007151
Piccarreta Davis PC
145 S. Sixth Avenue
Tucson, AZ 85701
Ph: (520) 622-6900
Fax: (520) 622-0521
[email protected]

H. Michael Wright
Udall Shumway & Lyons
30 West First Street
Mesa, AZ 85201-6654
Ph: (480)461-5300
Fax: (480)833-9392
[email protected]

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.

John A. Furlong, Bar No. 018356
General Counsel
State Bar of Arizona
4201 N. 24th Street, Suite 100
Phoenix, Arizona 85016-6266
602.252.4804
[email protected]

Patricia A. Sallen, Bar No. 012338
State Bar of Arizona
4201 N. 24th Street, Suite 100
Phoenix, Arizona 85016-6266
602.252.4804
[email protected]

Michael Fairbairn Córdova
Michael Cordova P.C.
1700 North 7th Street
Phoenix, AZ 85006
602-265-6700
[email protected]
State Bar Number 14164

I have read the proposed change to ER 1.15 authored by Mr. Trachtenberg and Mr. Abney. It 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.

Michael E. Larkin
LAW OFFICE OF MICHAEL E. LARKIN
405 W. Franklin St.
Tucson, Arizona 85701
Fax: 520 620 6702
[email protected]
Bar Number: 009497

Justices of the Arizona Supreme Court
I write to comment on the proposed change to ER 1.15. submitted by the Arizona Association of Justice. I support Petition R12-0032. It is a common sense resolution to an impractical obligation on plaintiffs and their attorneys in personal injury matters. The proposed change places the burden on the person making the claim to a plaintiff's personal injury recovery. This is as it should be. The proposed change provides for a reasonable time period for the person making such a claim to act. The proposed change provides for reasonable notice to the person making the claim. The proposed change is necessary and welcome. Please adopt the proposed change.
Michael E. Larkin

Tod Lee Stewart
Stewart & Torgersen, P.A.
1702 E. Highland Avenue, #409
Phoenix, AZ 85016
602-297-9300
[email protected]
State Bar Number 018163

Dear Justices,

I have read the proposed change to ER 1.15 submitted by the Arizona Association for Justice and am writing in support of Petition R-12-0032.

The current state of ER 1.15, as written and interpreted:

(a) creates an ethical-equivalent to a prejudgment attachment without any of the statutory or constitutional protections;

(b) puts attorneys in a conflict-riddled position of owing dueling ethical and legal duties to clients and third-parties (which are almost always adverse to one another), e.g., Hotel Emps. & Rest. Emps. Int'l Union Welfare Fund v. Gentner, 50 F.3d 719, 721 (9th Cir. 1995) (holding that the imposition of a "dual service" to a client and third party lien claimant violates ethical rules and put attorneys in an "untenable position" of representing dueling interests that are typically adverse); and

(c) makes clients--particularly clients under financial distress--vulnerable to illegitimate claims.

The practical and real-world effect of ER 1.15 is that it freezes client funds, but it does so without any established or preliminary legal process. In fact, the ethical rule is triggered merely by "claim[ed] interests" of third-parties, ER 1.15(e), and is broadly applied to all "matured legal or equitable claims." ER 1.15, Comment No. 4. This results in inexorable application of the rule in virtually every setting since no one knows the true definition of a "matured legal or equitable claim" and the Comment warns against attorneys "unilaterally arbitrating" these matters.

This puts attorneys at odds with their clients, to whom they owe fiduciary duties. The situation is worsened, however, by the Rule and Comment's suggestion that the burden is on these attorneys and their clients to file suit to litigate the existence or scope of alleged third-party claims. The fact is, most injured clients are under financial duress -- after all, tort recoveries only aim to put the victim back to where they were before the tort. This leaves injured clients vulnerable to illegitimate claims against their tort recoveries, often forcing them to make the impossible choice between expensive and time-consuming litigation versus extortive nuisance payments to unscrupulous third-party claimants.

I have read the examples of illegitimate claims in the Petition and those mirror the types of circumstances I now face in my personal injury practice. This is a problem that has increased substantially over the last 5 to 10 years.

The proposed change in R-12-0032 strikes a reasonable and just balance between protecting legitimate third-party claims, ensuring conflict-free representation and protecting the public from improper third-party claimants. It should be adopted in full.

/s/ Tod Lee Stewart

John A. Furlong, Bar No. 018356
General Counsel
State Bar of Arizona
4201 N. 24th Street, Suite 100
Phoenix, Arizona 85016-6266
602.252.4804
[email protected]

Geoffrey M. Trachtenberg
Levenbaum Trachtenberg PLC
362 North Third Avenue
Phoenix, Arizona 85003
(602) 271-0183 - voice
(602) 271-4018 - facsimile
[email protected]

June 20, 2013

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

Re: Supreme Court No. R-12-0032 and R-11-0024.

Dear Justices,

I am writing on behalf of Petitioners to reply to the Comment of the State Bar of Arizona on Petition to Amend Ethical Rule 1.15, Rule 42, Rules of the Arizona Supreme Court (filed 4/29/2013 under P-11-0024) (the “SBA Alternative”).

Petitioners support the SBA Alternative and appreciate the hard work of the SBA and its Committees, all of whom recognize the need to amend ER 1.15. The Court should consider whether it is advisable to adopt the language in the SBA Alternative concerning whether “the lawyer believes that the third party does not have a matured legal or equitable claim to the property.”

While the SBA has indicated in Committee that a subjective belief would be sufficient to satisfy this requirement, Petitioners request that the Court consider whether it is necessary or appropriate (a) to carve out this circumstance for application of the new rule or (b) to require the lawyer to render a legal opinion that a third-party claim is not a “matured legal or equitable claim.”

First, carving out application of the rule to situations where “the lawyer believes that the third party does not have a matured legal or equitable claim” is unnecessary. The contemplated notice mechanism provides ample due process to third parties who assert disputed claims to property in the lawyer’s possession. This notice mechanism calls for both personal service and a three-month sequester to allow the third-party to file suit before property is released to a client. And even then, the new rule does nothing to impair the third party’s substantive legal rights if they subsequently decide to make a claim.

Second, requiring a lawyer to render a legal opinion that a third-party claim is not a “matured legal or equitable claim” puts a burden on the lawyer and may discourage some lawyers from adopting the new procedure. Although the SBA says that the standard is subjective, the phrase “matured legal or equitable claim” is a vague phrase that is not defined by any known source. In fact, it appears to originate from Professors Hazard and Hodes who state “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). They use the phrase once and they do not define it.

The SBA Alternative is welcomed and supported by Petitioners. But, the Court should consider whether it is necessary to include a requirement that limits the new rule to situations where the lawyer subjectively “believes that the third party does not have a matured legal or equitable claim.” Petitioners respectfully suggest the Court consider eliminating that portion of the SBA Alternative in any final rule.

Kind regards,

LEVENBAUM TRACHTENBERG PLC


Geoffrey M. Trachtenberg