When a lawyer holds property a client gave the lawyer and an opposing party claims it under a prior settlement, must the lawyer return the property to the client?

Plain-English summary

The inquiry concerned a lawyer who had been given property by a client, where an opposing party claimed ownership of that property pursuant to a prior settlement. The question was how the lawyer should handle the competing claims.

The committee drew a line based on how clear ownership was. If it is clear to the lawyer that the property belongs to the client, then under RPC 1.15(d) the lawyer must return the property to the client as requested, with appropriate advice regarding any further liability posed by the client's apparent intentions. If ownership of the property is not clear, the committee was of the opinion that the lawyer could institute an interpleader action and let the parties resolve the question in court, but that under the circumstances presented it might be the lawyer's better practice to advise the parties that the lawyer intends to continue holding the property in safekeeping until they resolve, by settlement or lawsuit, to whom the property belongs.

Currency note

This opinion was issued in 1987, before the 2006 revisions to the Washington Rules of Professional Conduct. The rule then numbered RPC 1.15(d), governing a lawyer's handling and surrender of client property, corresponds to Model Rule 1.16(d) and was later renumbered and amended. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule mentioned here.

Common questions

Q: If a client gives a lawyer property and an opposing party claims it, does the lawyer have to give it back to the client?

A: Per the opinion, yes when ownership is clear. If it is clear to the lawyer that the property belongs to the client, the committee was of the opinion that the lawyer must return it to the client under RPC 1.15(d), with advice about any further liability the client's intentions might pose.

Q: What should the lawyer do when it is not clear who owns the disputed property?

A: The committee was of the opinion that the lawyer could file an interpleader action to let a court decide, or, as what the committee called the better practice under the facts, advise the parties that the lawyer will keep holding the property in safekeeping until they resolve ownership by settlement or lawsuit.

Q: Does the lawyer have to advise the client about anything when returning the property?

A: Yes. The opinion conditions the return on the lawyer giving "appropriate advice regarding any further liability posed by your client's apparent intentions," tying the duty to return to a duty to counsel the client about consequences.

Background and rules framework

The opinion applies the rule then numbered Washington RPC 1.15(d), corresponding to Model Rule 1.16(d), which addresses a lawyer's handling and surrender of property to which the client is entitled. The committee used the clarity of ownership as the dividing line: a clear client entitlement triggers the duty to return the property (with advice about consequences), while a genuine dispute over ownership supports either interpleader or continued safekeeping until the claimants resolve the dispute.

Citations and references

Rules of Professional Conduct:

• Washington RPC 1.15(d) (handling and surrender of client property), corresponding to Model Rule 1.16(d).

See also

• WSBA Ethics Op. 1125: asserting a possessory lien over client property held to secure fees
• WSBA Ethics Op. 1120: returning a signed settlement release to the client and advising consequences
• WSBA Ethics Op. 1127: taking an assignment of a client's judgment to secure fees

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=236

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Advisory Opinion: 1156
Year Issued: 1987
RPC(s): RPC 1.15(d)
Subject: Client property; competing claims of client and opposing party for property

The Committee was of the opinion that where you have been given property by a client, and an opposing party claims ownership of that property pursuant to a prior settlement, that if it is clear to you that the property belongs to your client then pursuant to RPC 1.15(d), you must return the property to your client as requested, with appropriate advice regarding any further liability posed by your client's apparent intentions. On the other hand, if ownership of the property is not clear, then, while you could institute an interpleader action and allow the parties to resolve the question in court, under the circumstances presented by your inquiry, it might be your better practice to merely advise the parties that you intend to continue to hold the property in safekeeping until they are able to resolve between them to whom the property belongs, either by settlement or law suit.