§ 10.7.3 DEALING WITH DISPUTED THIRD-PARTY INTERESTS

• Jurisdiction: Arizona

§ 10.7.3 Dealing with Disputed Third-Party Interests

While ER 1.15 presents few significant issues in connection with undisputed third-party interests, dealing with disputed third-party interests is more complicated. Two reoccurring issues in this area involve (i) an attorney's obligation to resolve disputes and (ii) mechanisms to resolve disputes.

a. Obligation to Resolve Disputes

ER 1.15 does not specifically define an attorney's obligation to resolve disputes, but since ER 1.15 repeatedly emphasizes "prompt" action by any attorney in connection with notifying, delivering, accounting, and distributing funds, it is reasonable to conclude attorneys must give similarly active attention to resolving disputes. See Restatement (Third) of Law Governing Lawyers § 45 (Am. Law Inst. 2000) ("How soon the delivery must occur depends on the circumstances."); see also Hon. Samuel A. Thumma & Lynda C. Shely, Fee Agreements: A to Z, 38 Ariz. Att'y at 22 (January, 2002) ("Disputed money cannot be held indefinitely in the firm trust account and should be interpled promptly."). In addition, the State Bar of Arizona advises that, "if you are holding funds that are in dispute, create ticklers to assure that you take action to resolve the dispute as promptly as possible." See Patricia A. Sallen, et al., Client...