Dana Roberts
Knapp & Roberts
8777 N. Gainey Center Dr. Suite 165
Scottsdale, AZ 85258
480-991-7677
Fax: 480-991-0058
[email protected]
013654

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); 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/ Dana R. Roberts

I write in support of R-12-0032 PETITION TO AMEND ETHICAL RULE 1.15, RULE 42, RULES OF THE ARIZONA SUPREME COURT. I think the proponents and supporters have well stated the need for the rule and the injustice it seeks to ameliorate, and I will not burden the court with repetitive argument. I do wish to state that the problem is real, it impacts thousands of injury cases, and gives medical lien claimants -- including unjustified lien claimants -- a power to hold other people's money hostage which is unique in the law (except perhaps for the IRS).

Richard S. Plattner
Plattner Verderame, PC
PO BOX 36570
Phoenix, AZ 85067-6570
602-266-2002 - phone
602-266-6908 - fax
[email protected]
#005019

Amy Hernandez
Piccarreta Davis PC
145 S. 6th Avenue
Tucson, Arizona 85701
520-622-6900
520-622-0521 fax
[email protected]
Bar No. 022892

Please consider my comment regarding the proposed ethical rule related to lien claims. I practice exclusively in plaintiff's personal injury. From a practical standpoint, dealing with liens can take as much time and effort as proving and resolving the personal injury case. This is because the entities that claim a lien are often from out of state, do not understand Arizona law, ignore communications, and frequently have no basis for their claim.

While I may personally disagree with certain liens, when properly asserted under Arizona or federal law I have no hesitation ensuring they are promptly paid from my client's recovery. It is the entities that make invalid claims and then blackmail me and my client that are the most difficult to resolve. You can cite Arizona law to them until they are blue in the face and they simply send another demand letter. Rarely are attorneys involved on the opposite side. You communicate with a lay person who seldom understands liens in Arizona or when ERISA actually applies. It can be a never ending black hole. All the while, the client has to wait to close this chapter of their lives. I have had clients simply give up and instruct me to pay "something" to the lien holder in order to move forward. It is hard for a client to understand that his or her recovery is held hostage when their attorney is explaining that the lien is invalid and should not be paid. Clients wonder if the lien is invalid, why can't you disperse to me?

As other comments point out, this scenario is not accepted in any other area of the law. It should not be tolerated as it relates to lien claims either. Thank you.

Ryan Skiver
Warnock MacKInlay & Carman, PLLC
7135 E. Camelback Rd., Suite F240
Scottsdale, Arizona 85251
P(602)381-6669
F(602)381-6560
[email protected]
State Bar # 024552


Dear Justices,

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

The current state of ER 1.15, is flawed, and puts an attorney in an improper ethical position between their obligations to clients and to those of alleged lien holders.

The practical and real-world effect of ER 1.15 is that it freezes client funds, by preventing release without a proper determination as to validity of a claimed interest.

This puts attorneys at odds with their clients, and strains the relationship. Forcing the client to then litigate an additional issue and drag their case out even farther to establish that the claimed liens are invalid.

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.

The examples of illegitimate claims in the Petition accurately reflect the situations I face in my personal injury practice.

The proposed change in R-12-0032 protects legitimate third-party claims, while also helping to ensure conflict-free representation and protecting the public from improper third-party claimants.

The proposed change should be adopted as written.


/s/ Ryan Skiver

Alan Bowman #006134
Bowman & Smith, PC
113 W Giss Parkway
Yuma, Az 85364
928-783-8879
928-314-1186 (fax)
[email protected]

I am a certified specialist in wrongful death and injury litigation since 1990. I have only done this kind of law since 1979 when I was first admitted. Dealing with potential claims of third parties on settlement proceeds by liens or subrogation is constantly taken up more and more of my practice. I support the changes to ER 1.15.

A current reading of ER 1.15 and comments with opinions from the State Bar places the burden, unfairly on injured victims to resolve the claim before there is any adjudication that there is a valid claim. It creates a substantial hardship on the injured person. It obligates the victim's attorney to start litigation against all claimants, even your own client, thereby creating a conflict of interest with my own client and causing them to need separate counsel which they can not afford.

Moreover, it leverages my client to resolve unfair claims because of substantial financial issues. Many claimants will not even respond to questions other than they are making a claim.

I am trying to bring a declaratory judgment on a case right now but the claimant is in Wisconsin and claims they do not do any business in Arizona so there is no jurisdiction. I already know from case law that the federal court has no jurisdiction. This involves over $200,000.00 that my client needs. Where do they go to resolve this issue?

The proposed change puts the burden where it belongs, on the person making a claim. They should have to bring an action and prove their claim, just like everyone else.

Carol A. Bowman
Bowman & Smith, P.C.
113 W. Giss Parkway
Yuma, AZ 85374
FAX Number (928) 329- 1816
[email protected]


Dear Justices,



This proposed rule change to ER 1.15 is a needed reform to the current rule which essentially places attorneys in conflict with their own clients when a third party makes a claim to tort proceeds held for a client. Under the current rule, the mere making of a claim to proceeds by a third party can trigger ethical duties to the third party by the attorney that can conflict with duties to the client. As many other comments have noted, the current rule also suggests that the client or his or her attorney must bring suit to establish the legitimacy of these claims.

The proposed rule change would place the burden where it belongs--on the person or entity making the claim--and at the same time provide a procedure for establishing the legitimacy of these claims that does not place an attorney in the position of potentially being in conflict with clients. This rule change should be adopted as proposed.

H. Christian Bode
Bode & Collins, P.L.C.
7377 E. Doubletree Ranch Road #210
Scottsdale, Arizona 85258
480-355-5020 (phone)
480-355-5021 (fax)
[email protected]
Bar No. 0007346

I urge the adoption of the amendment proposed for the reasonas stated by the others who have commented on the proposal. The current rule allows vague threats or claims to prohibit distribution of funds properly belonging to clients. Often, the amount held does not justify the client hiring an attorney to prosecute a claim to gain possession of the (client's own presumptive) money and resolving the dispute can be outside of the representaiton agreement signed by the client with the holding attorney. Therefore, the funds languish in limbo. The proposal provides a practical mechanism for bringing the dispute to a timely resolution and the funds being distributed to their rightful owneer.

Krista M. Carman
Warnock, MacKinlay & Carman, PLLC
246 S. Cortez Street
Prescott, AZ 86303
928-445-8056
Fax 928-445-8046
[email protected]
Az State Bar No. 21700

Dear Justices,

I am writing in support of Petition R-12-0032 as submitted. The proposed changes to ER 1.15 would significantly improve the Rule.

The present ER 1.15, virtually forces clients to compromise and pay questionable or even illegitimate claims in order to obtain the benefit of their settlement. It also puts attorneys in an untenable position where they owe a duty to third parties whose interest are in direct conflict with their clients.

The resolution suggested by the present Rule and the Comments, that the burden is on these attorneys and their clients to file suit to litigate the existence or scope of alleged third-party claims, is no solution at all. In any reasonable dispute resolution setting, the burden is on the party making the claim. The present Rule turns this on its head by forcing a client and the attorney to disprove the claim by incurring unreasonable cost and expending additional time. 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 and rarely ever do. This leaves injured clients exposed 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.

The proposed change in this petition creates a 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.

Thank you for your consideration,

/s/ Krista M. Carman

Robert Bohm, Esq.
Knapp & Roberts
8777 N. Gainey Center Dr. Suite 165
Scottsdale, AZ 85258
480-991-7677
[email protected]
005226

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); 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. This in turn can be emotionally and financially stressful on the client. 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. Clients are often forced to make the impossible choice between expensive and time-consuming litigation versus extortive nuisance payments to unscrupulous third-party claimants due to illegitimate claims against their tort recoveries.

I have read the examples of illegitimate claims in the Petition and those mirror the types of circumstances I face. This problem has gotten worse within the last decade. This is why I agree with the Petition R-12-0032. It establishes a reasonable and just balance between allowing legitimate third-party claims, creates an environment of conflict-free representation, and protects clients from unacceptable third-party claimants.

/s/ Robert Bohm

Scott B. Seymann
Adelman German, PLC
8245 N. 85th Way
Scottsdale, AZ 85258
Tel: 480-607-9166
Fax: 480-607-9031
[email protected]
Arizona State Bar # 027215

Dear Justices,

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

Currently ER 1.15 raises several concerns:

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

(b) it leaves attorneys owing dueling ethical and legal duties to clients and third-parties (which are often adverse to one another); and

(c) it makes clients vulnerable to illegitimate claims.

The practical effect of ER 1.15 is that it freezes client funds without any established or preliminary legal process. It 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. Thus the rule can be considered applicable in virtually every setting since the true definition of a "matured legal or equitable claim" is subject to wide interpretation, and the Comment warns against attorneys "unilaterally arbitrating" these matters.

This puts attorneys at odds with their clients, to whom they owe fiduciary duties. Further, 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 only exacerbates the situation. Most injured clients are under financial duress, and this Rule leaves them vulnerable to illegitimate claims against their tort recoveries, often forcing them to make the difficult choice between pursuing additional, burdensome litigation and making nuisance payments to unscrupulous third-party claimants.

I have read the examples of illegitimate claims in the Petition and they are representative of some of the circumstances I currently face in my personal injury practice. This is a problem that has increased substantially in recent years.

The proposed change in Petition 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. This Petition should be adopted in full.

Gabriel D. Fernandez
437 W. Thurber Rd. #16
Tucson, AZ 85705
Bar #: 016483
520-293-6255
Fax: 520-293-3937
[email protected]

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.

Gabriel D. Fernandez
Law Offices of Gabriel D. Fernandez, P.C.

Darren M. Clausen, Esq.
Clausen and Moore Law Firm
4578 E. Camp Lowell Drive
Tucson, Arizona 85712
Phone: 520-327-7113
Fax: 520-327-3414
Email:[email protected]
Arizona State Bar No. 019427

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 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.

Sincerely,
/s/ Darren M. Clausen, Esq.

J. Tyrrell Taber
2390 E. Camelback Road, Suite 400
Phoenix, AZ 85016
602-248-8203
602-248-8840
[email protected]
005204
Requesting rule ER 1.15 be repealed in full and replaced with Petition R-12-0032

Lawrence K. Lynde, Esq.
4506 N. 12th Street
Phoenix, Arizona 85014
602-944-5710
602-944-1136
[email protected]
Attorney Bar No.: 011156

Richard A. Cruz, Esq.
Managing Attorney
Pincus & Associates, PC
2133 E. Warner Road, Suite 101
Tempe, AZ 85284
480-777-2599
480-777-2799 (fax)
[email protected]
Bar No. 023164

Dear Justices:

The purpose of this writing is to support the changes proposed in Petition R-12-0032.

Without reiterating prior compelling arguments for the adoption of R-12-0032, my statement focuses on the inequitable burden my client (i.e. the victim) must bear to protect their settlement.

Under the current rule, the victim (via his/her lawyer) must incur the time and fees of filing “an action” against a third party in the event of a “dispute” over the victim’s property. As a result, the clients (1) lose out on the cost of money, (2) unfairly incur charges for filing an action and (3) makes them vulnerable to “extortion”/illegitimate claims (i.e. forcing to either institute litigation or pay something to end the illegitimate claim).

Under the proposed R-12-0032 language, equality is restored in that the burden is on the third-party seeking funds to establish their claim. This equality is the basis of our legal system - from writ of attachments to a complaint against a property’s possessor. The proposed ninety (90) day period is fair, reasonable and benefits both sides: (1) it helps the victim/s obtain finality allowing access their much needed financial help, and helps the victim’s lawyer resolve “disputed” claims within that period; and (2) it allows the “disputed” lien holders the opportunity to legitimize their claims.

Times have changes and the rules must reflect the same. This proposal is nothing more than a change in the right direction; a change to maintain fair and equality by and between all.

Thank you for your time.

/s/ Richard A. Cruz, Esq.

Jay L. Ciulla
Ciulla Torralba, PLLC
3030 N. Central Avenue, Suite 608
Phoenix, AZ 85012
Telephone (602) 495-0053 Ext. 103
Facsimile (602) 258-7199
Email: [email protected]
Bar No. 017971

Dear Justices:

I am writing in support of Petition R-12-0032. As an attorney who represents injury clients, I can unequivocally state that current ER 1.15 creates more ethical problems than it seeks to resolve. The current rule unnecessarily places an extrajudicial attachment on client funds and effectively freezes them regardless of the motivation of the lien claimant to seek a resolution. It also puts the attorney in the conflicted position between the interests of our clients to whom we owe fiduciary duties and third party lien claimants. Lastly, the current interpretation of the rule places the burden on the injury client and their attorney to file a lawsuit to force the litigation on the validity of a lien claim, instead of the lien claimant.

The proposed change in R-12-0032 will resolve these problems. Therefore, I request that you adopt it.

Regards,

/s/ Jay L. Ciulla

Maren Hanson
Tobler & Associates, P.C.
1630 S. Stapley Drive
Suite 200
Mesa, AZ 85204
PH: 480-898-9700
FAX: 480-464-1172
[email protected]
Bar No.: 021361

I am writing in support of the change to Ethical Rule 1.15.

I am a personal injury attorney who represents Plaintiffs. Many times after a settlement agreement has been reached, disbursement of settlement funds to an injured client has been significantly held up due to questionable third-party lien claims.

The current requirements of ER 1.5, as stated in Comment 4, seem to require lawyers to "file an action" with the Court to resolve even questionable lien disputes. The cost and time to do such puts the injured claimants at a severe disadvantage, and often forces them to make compromise payments to questionable lien claimants just to see the matter resolved.

The current requirements also put a lawyer at odds with his or her own client. And sometimes, the current rule leaves the lawyer guessing as to his or her ethical obligations.

The new proposed rule changes make explicitly clear what steps a lawyer may take to resolve a lien dispute. Moreover, the changes appropriately place the responsibility of filing a legal action on the third-party who is making the lien claim - as opposed to on the injured plaintiff, who is least likely to be able to bear this burden.

John A. Furlong, Bar No. 018356
General Counsel
State Bar of Arizona
4201 N. 24th St., Suite 100
Phoenix, Arizona 85016-6266
Telephone: (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]

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