Ethics Opinions

ETHICS OPINION NO. 104
OF THE MISSISSIPPI BAR

RENDERED Thursday, June 06, 1985

CLIENT TRUST FUNDS: A lawyer holding property or monies belonging to clients with whom he has lost contact must retain and account for said funds, subject to the Mississippi Uniform Disposition of Unclaimed Property Act.

The Ethics Committee of the Mississippi State Bar has been asked to render an opinion on the following fact situation:

Currently we have on deposit in our client trust funds, monies belonging to clients with whom we have lost contact. The funds consist of filing fees paid by clients and refunds of such fees received from the courts. The clients to whom the above funds are owed have moved from the addresses which we have for them in our files. Efforts to locate them by calling telephone numbers, through directory assistance, and through contacts with friends, relatives and neighbors have failed.

DR9-102[B] provides:

A lawyer shall:

(1) Promptly notify a client of the receipt of his funds, securities, or other properties.

(2) Identify and label securities and properties of a client promptly upon receipt and place them in a safe-deposit box or other place of safekeeping as soon as practicable.

(3) Maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to his client regarding them.

(4) Promptly pay or deliver to the client as requested by a client the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive.

It is too obvious to require explanation that client trust funds and other property held by a lawyer are held by him in a fiduciary capacity. They never become the property of the lawyer. In the present fact situation, the lawyer has lost contact with his client and finds himself unable to return the funds, although he desires to do so. As a matter of ethics, the lawyer is under an obligation to hold the client's funds indefinitely and to make all reasonable efforts to locate the client in order to return the funds or property. As a matter of law, however, a different mechanism is imposed by the provisions of the Mississippi Uniform Disposition of Unclaimed Property Act, Miss. Code Ann. 89-12-1 et seq. Section 89-12-13 provides that any money held in a fiduciary capacity for the benefit of another person is presumed abandoned unless the owner has, within seven years after it became payable or distributable, accepted payment, corresponded in writing concerning the property, or otherwise indicated an interest in the property as evidenced by a memorandum or other record on file with the fiduciary. Additional conditions are imposed by Miss. Code Ann. 89-12-17, which are not necessary for this opinion. Every person holding funds or other intangible personal property presumed abandoned under the provisions of the Act is required to report to the State Treasurer on a form prescribed by him, Miss. Code Ann. 89-12-23, and thereafter to deliver the money to the State Treasurer in accordance with the procedures of the statute, Miss. Code Ann. 89-12-29. Upon the payment or delivery of abandoned property to the Treasurer, the State of Mississippi assumes custody and is responsible for the safekeeping thereof. The person who pays or delivers abandoned property to the Treasurer in good faith is relieved of all liability for any claim which then exists or which thereafter may arise or be made in respect to the money or property paid or delivered. Miss. Code Ann. 89-12-31.

It is the conclusion of the Ethics Committee that a lawyer holding funds in his trust account is required to exercise reasonable care to maintain accurate addresses of the clients to whom such funds are owed and to pay those funds over to the client as soon as possible, in order to avoid situations as this from occurring. Nonetheless, if it is impossible to locate a former client to whom client funds are due, they must be held by the lawyer, who shall continue to make reasonable efforts to locate the client and deliver the funds to him until presumed abandoned under the Mississippi act, at which time the procedures of the act govern the disposition of the funds or other property