Debtor settles a Missouri personal injury claim. A judgment creditor of that debtor serves a garnishment on the debtor’s lawyer holding the settlement money. Lawyer objects to the garnishment interrogatories claiming that the Attorney-Client privilege protects information such as the attorney-client fee agreement, whether the lawyer holds or is obligated to pay any money belonging to the debtor, and so on.
The Western District of the Missouri Court of Appeals recently issued its opinion rejecting the attorney-client objection used by the lawyer to protect against discovery of the client’s share of the six-figure personal injury settlement. The case is State of Missouri v. Hortense Cain, Slip Opinion WD74734 (filed November 13, 2012), and simply put it holds that the privilege does not apply to client identity and fee information. (at p. 21) That court reasons that “the attorney-client privilege applies only to confidential professional communications, and the payment of fees is usually [merely] incidental to the attorney-client relationship.”
Moreover, Rule 4-1.6 of the Missouri Rules of Professional Conduct requires the “holding” lawyer to notify third persons with an interest in such funds held and to pay/deliver to the third person his share due along with a full accounting (upon request by the third person). Thus, the lawyer actually owes a duty to the third person to disclose (not withhold) and disburse the information and funds due the third person. And, Rule 4-1.15(i) requires the lawyer to promptly disburse from his trust account those monies belonging to the client–not hold them beyond the term of the garnishment, for example.
The court also noted that as a general rule, communications between lawyer and his client are not privileged when the lawyer is acting as a conduit for the transfer of money. (p. 24)
Upon holding the attorney-client privilege inapplicable here, the court justly let it be known: “[T]o hold otherwise would permit judgment debtors to willfully and deliberately protect assets from collection merely by placing property in the hands of an attorney.”
Kurt H. King
Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068
816.781.6000
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