What is the legal obligation of a lawyer in handling settlement funds where there is a potential child support lien?
As attorneys, our legal and ethical duty is first and foremost to our client. We are to be passionate in our representation, upholding client confidentiality while abiding by our client’s decisions. However, we’re also officers of the court. Under no circumstance may we assist a client in breaking the law or injuring another. But what if our duty to our client clashes with our duty to the court? Recently, our firm was confronted with such a clash.
If There Is a Potential Child Support Lien, Does a Lawyer Have to Pay It?
On first glance, the answer seemed easy. We have a legal and ethical duty to protect any third-party interest where there is a statutory lien being asserted. In this case, the lien is a child support order. Even if the client tells the attorney not to pay this debt, it would be unlawful to avoid these liens. This also applies to court orders involving the funds. If they assist in avoiding these, the attorney will be subject to legal and ethical sanctions.
Acting as the dedicated attorney, we must dig a little deeper. How did we become aware of the potential child support claim? Florida Statutes section 409.25656 sheds some light on the question. The Florida Department of Revenue (DOR) can levy any credit or personal property for any past due child support owed. This includes insurance settlements.
There is a database that tracks bodily injury insurance settlements exceeding $3,000. Its purpose is to identify noncustodial parents who owe child support and also have a claim with an insurer. The Federal Office of Child Support Enforcement (OCSE) maintains this database via the Child Support Lien Network.
If OCSE matches an outstanding child support obligation to a claimant, they initiate the garnishment process. First, they generate an Income Deduction Notice and mail it to the owing parent and the respective insurance company. This puts both parties on notice of the statutory lien. Upon settlement of a claim, the insurance company then notifies the attorney of the child support lien. Once the attorney receives notice of the lien, they must honor it by settling it on behalf of the parent.
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What If I Mention a Possible Child Support Lien to My Lawyer?
The situation seems simple. When the OCSE asserts a child support lien and the lawyer receives actual notice, the lawyer must honor this lien. They’re obligated to, whether the client instructs the attorney to do so or not. But what happens when there’s no match, but the client mentioned the possibility of a child support lien during representation?
The Florida Rules of Professional Conduct aren’t so clear here. The Florida Bar hasn’t issued a legal ethics opinion that is on point with this issue. Thus, we look to a sister state’s legal ethics opinion for guidance.
Virginia Legal Ethics Opinion 1865 gives us an answer. It says a lawyer must have actual knowledge of a third party’s lien to create a duty to pay it. Actual knowledge in this instance would come in the form of the Income Deduction Notice issued by the OCSE.
The answer is a little hazy where there is not actual notice of a lien. When an attorney must investigate whether there is actually a lien, they may not be obligated to protect that claim. In this instance, the attorney would be obligated to communicate with the OCSE to determine if a claim exists. Through these communications, the lawyer would disclose that the client is seeking a recovery or settlement against a third party. Communication with the OCSE could prompt filing of a lien for which it was unaware. This is a direct violation of RPC 4-1.6. This rule prohibits a lawyer from revealing information relating to representation of a client without the client’s informed consent.
Lawyers Must Stay Dedicated to Their Clients
So, back to the original question. What is the legal obligation of a lawyer in handling settlement funds where there is a potential child support claim? It’s clear that notice is crucial to the lawyers legal and ethical duty.
Remember that legislature exists to allow claim interception power. We can assume that this relieves attorneys of the duty to investigate every claim settled for potential liens. This helps lawyers and clients, as liens could conflict with the attorney’s ultimate duty to stay dedicated to the client. It’s the State’s duty to investigate and notify the attorney of any valid child support lien.
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