UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.
Ethics Advisory Opinion 92-15
A was represented in an action for separate maintenance and support. The trial court granted certain relief to A and awarded A attorney's fees. The court's order specifically provided for B to pay, to A through the office of A's attorney, attorney's fees in a specified sum.
B appealed the order of the trial court. However, during the pendency of the appeal for reasons which are unexplained, B paid the attorney's fees as required by the order. For the purpose of this opinion you may assume that an award of attorney's fees is stayed by an appeal of the order. A instructed her attorney to apply the monies received from B to her account in accordance with their fee contract. The attorney fee award did not pay the entire balance of the account; however, during the pendency of the appeal, A subsequently paid the balance of her account with her attorney according to their fee contract.
The attorney's fee award was subsequently reversed on appeal.
Questions:
1. If B or his attorney demands repayment from A's attorney, must A's attorney honor the demand?
2. If A demands that her attorney repay B the monies he paid to her through the office of her attorney, must the attorney honor the demand?
Summary:
A's attorney need not repay the money either to the opposing party or to A because the money was voluntarily paid by A as a fee, and there was no requirement to hold the funds in trust.
Opinion:
The first question deals with the significance of an appeal staying an order to pay attorneys fees. A stay is simply a legal provision which exempts a party from being required to obey a court order on penalty of contempt of court. A stay is nothing more; it does not prohibit a voluntary payment of funds.
When the funds were delivered to A's attorney and A directed that they be used to satisfy the A's contract with her attorney, the funds became the property of the attorney. In some criminal cases, a forfeiture statute could change this, but there is no forfeiture statute in this situation.
The reversal of the attorney's fee award on appeal did not alter the liability of A to pay her attorney. Thus, A is clearly not entitled to a refund.
In Advisory Opinion 92-11, it was stated that a fee award is the property of the client and not the attorney. Thus the complement is also true, that a reversal of an attorney's fee award will render the client liable for repayment, but not the attorney.
The payment by B while represented by an attorney may not have been required, but it was not made in violation of any order. While A may be liable to repay B, A's attorney is no more required to pay A's debt than is any other creditor of A.