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Ethics Advisory Opinion 05-15

April 13, 2005

South Carolina Bar Ethics Advisory Opinion 05-15

RULE 1.15

Date: September 16, 2005

Facts:
Lawyer disbursed $8,000 to insurance company in 1999 in satisfaction of the insurance company’s claim in a personal injury settlement. Six years, later the check has not cleared. The insurance company has not contacted the attorney or the client.

Question:
What should Lawyer do with the $8,000 remaining in the trust account?

Summary:
Lawyer has an obligation to safeguard property for clients and third persons. Under the Uniform Unclaimed Property Act, the owner is a creditor, claimant or payee or a person having a legal or equitable interest in property subject to this act, and a check that has been mailed to an owner and not presented for payment is unclaimed property. Lawyer should be certain that all actions set out in Rule 1.15 and Ethics Advisory Opinion 02-05 have been taken and then should disburse the funds in accordance with this act.

Opinion:
Lawyer should be certain that all requirements of Rule 1.15 have been met. Rule 1.15 requires that property belonging to clients or to third persons must be properly safeguarded. South Carolina Appellate Court Rule 417 also imposes strict requirements to maintain financial records. These include accounting for disbursements to third persons.

Lawyer should also follow the guidance of Ethics Advisory Opinion 02-05. This requires that Lawyer exhaust all reasonable means of notifying the insurance company including notice by publication.

Under the Uniform Unclaimed Property Act, South Carolina Code §27-18-10, et seq., the insurance company may be the owner of these funds. A check that is mailed to an owner and not presented for payment is defined in this act as unclaimed property. Since over five years have passed, if all ethically required actions to disburse the funds have been attempted and the funds remain in the account, Lawyer should consider proceeding as set out in the Uniform Unclaimed Property Act.

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