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How can we respond to a bounced $16k check from a law firm in NYC?

  • What are some first steps that should be taken when a settlement check written to a client (resident in NYC) by an NYC law firm bounces? Aside from http://www.newyork.bbb.org/how-to-complain-about-lawyers-and-judges/ Better Business Bureau page about filing complaints against lawyers, is there any oversight mechanism, or regulatory body, or state or city office that can help to resolve this? Background: Two years ago my partner was hit by a car while crossing the street. He hired a personal injury law firm recommended by someone who had used that firm before. They dealt with the insurance company and reached a settlement. The amount after the lawyers fees to be paid was around $16,000. For the last year, my partner has been in a back and forth with the firm, trying to get the check. Every time he called, the lawyer was out of the office. They wouldn't mail the check, they wanted to hand it over in person, they arranged several meetings but the firm would always cancel the day of. This went on until finally my partner said he was coming to the office and would sit there until they gave him the check. So they then agreed to mail him a check, he received it and deposited it. The $16,000 check bounced and he just found out today. As a result, the bank froze my partner's bank accounts because, they said, this is 'shady activity.' He called the lawyer, who said there's nothing he could do because there is no one at the office until Monday. Lawyer said he has no idea how that could have happened. Admittedly, it's possible that the law firm will fix the issue on Monday, and that it was a clerical error - but considering how evasive they have been over the last year, we're concerned and want to gather resources so we can begin a response. At the very least we plan to ask them for a cashiers check on Monday. Other steps? http://en.wikipedia.org/wiki/Quis_custodiet_ipsos_custodes Or more specifically: Who watches the lawyers?

  • Answer:

    Wow. This is a very big deal. Settlement checks are supposed to be written out of a trust account that is solely devoted to client funds. A check is never never NEVER supposed to bounce from the trust account. When one bounces, it is a huge deal and should be treated as such. I know an attorney who was suspended for some trust account issues that were comparatively minor, when considered in light of your complaint.

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This is also the time that I would be reading the settlement agreement again carefully. If you are having this much trouble obtaining the funds - are you absolutely sure you can trust them to correctly calculate the amount your partner is due? I would trust nothing from them that I could not independently confirm.

NoDef

On the webpage for the http://www.courts.state.ny.us/ip/attorneygrievance/complaints.shtml, you'll see a link, on the left-hand side, to the http://www.nylawfund.org/. Check it out, and if the problem with this settlement check does not get worked out soon, consider filing a claim. As described on http://www.nylawfund.org/faq.html, the "The Lawyers' Fund was established . . . to provide reimbursement to law clients who have lost money or property as a result of a lawyer's dishonest conduct in the practice of law. The Lawyers' Fund is a remedy for law clients who cannot get reimbursement from the lawyer who caused the loss, or from insurance or other sources." Also, "[t]he fund is fiananced by the 271,000 members of the legal profession in New York State through a registration fee required by law. Since 1982, upwards of $132 million in awards of reimbursement have been paid to deserving law clients." My husband and I, both lawyers in NYS, have been paying that fee biennially for years. It pleases me that it might help people like you!

merejane

In addition to the evidence of their weird dodging over the past few months, they should definitely have more than $16K in their operating account. I strongly disagree with this.

jayder

A dear friend of mine was an attorney until she "borrowed" money from her clients trust account. Not only was she disbarred, she spent two years in prison. This is in Louisiana.

JujuB

Assuming that the law firm does resolve this, and gives him a cashiers check or some other instrument on Monday, and the Bank accepts it and the funds are verified, should we still report it to the committee? Including the fees that the bank charged too I hope. I'd still report it. Even if you get out of this OK, it'd help protect other clients against these shenanigans.

grouse

The NYS grievance committee is part of New York's consolidate court system. In order to be granted the right to appear before courts in the state, an attorney has to receive an official order from a specific court in that state. The courts of the state are responsible for supervising attorneys so appealing to the committee that hears grievances is the right way to go. As others have mentioned, bouncing a check (why was it bounced, was it returned for non-sufficient funds?) for a client settlement is a very, very serious problem.

fireoyster

Yeah, please do report back. Curious to hear how it works out (and pretty confident you'll wind up ok in the end).

Quisp Lover

Update: Hopefully the second to last update on this. My partner took the check to the issuing bank, which is HSBC. He tried to open an account (checking and/or savings) - and they said that if he did that, he would not be allowed to access any of the funds in that account for 30 days. They said "we open relationships, not accounts." Seriously. But in the process, they did verify the funds in the account. So he's taking it to his existing bank now and will talk to them about depositing it, and hopefully that will work.

jardinier

I wouldn't expect the attorney to act alarmed or nonplussed by it coming out of the operating account. C'mon, the guy is an attorney... He's used to keeping a poker face ... why would he tip his hand to you that he screwed up any more than you already know he did?

jayder

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