Rule 4-228 Receiverships

(a) Definitions. Absent Lawyer: A member of the State Bar of Georgia (or a Domestic or Foreign lawyer authorized to practice law in Georgia) who has disappeared, died, been disbarred, disciplined or incarcerated, become so impaired as to be unable to properly represent clients, or who poses such a substantial threat of harm to clients or the public that it is necessary for the Supreme Court of Georgia to appoint a receiver.

(b) Appointment of Receiver.

(1) Upon a final determination by the Supreme Court of Georgia, on a petition filed by the State Bar of Georgia, that a lawyer has become an absent lawyer, and that no partner, associate, or other appropriate representative is available to notify his clients of this fact, the Supreme Court of Georgia may order that a member or members of the State Bar of Georgia be appointed as receiver to take charge of the absent lawyer’s files and records. Such receiver shall review the files, notify the absent lawyer’s clients and take such steps as seem indicated to protect the interests of the clients and the public. A motion for reconsideration may be taken from the issuance or denial of such protective order by the respondent, his partners, associates, or legal representatives or by the State Bar of Georgia.

(2) If the receiver should encounter, or anticipate, situations or issues not covered by the order of appointment, including but not limited to, those concerning proper procedure and scope of authority, the receiver may petition the Supreme Court of Georgia for such further order or orders as may be necessary or appropriate to address the situation or issue so encountered or anticipated.

(3) The receiver shall be entitled to release to each client the papers, money, or other property to which the client is entitled. Before releasing the property, the receiver may require a receipt from the client for the property.

(c) Applicability of Lawyer-Client Rules.

(1) Confidentiality. The receiver shall not be permitted to disclose any information contained in the files and records in his care without the consent of the client to whom such file or record relates, except as clearly necessary to carry out the order of the Supreme Court of Georgia or, upon application, by order of the Supreme Court of Georgia.

(2) Lawyer-Client Relationship; Privilege. The receiver relationship standing alone does not create a lawyer-client relationship between the receiver and the clients of the absent lawyer. However, the lawyer-client privilege shall apply to communications by or between the receiver and the clients of the absent lawyer to the same extent as it would have applied to communications by or to the absent lawyer.

(d) Trust Account.

(1) If after appointment the receiver should determine that the absent lawyer maintained one or more trust accounts and that there are no provisions extant that would allow the clients, or other appropriate entities, to receive from the accounts the funds to which they are entitled, the receiver may petition the Supreme Court of Georgia or its designee for an order extending the scope of the receivership to include the management of the said trust account or accounts. In the event the scope of the receivership is extended to include the management of the trust account or accounts, the receiver shall file quarterly with the Supreme Court of Georgia or its designee a report showing the activity in and status of said accounts.

(2) Service on a bank or financial institution of a copy of the order extending the scope of the receivership to include management of the trust account or accounts shall operate as a modification of any agreement of deposit among such bank or financial institution, the absent lawyer and any other party to the account so as to make the receiver a necessary signatory on any trust account maintained by the absent lawyer with such bank or financial institution. The Supreme Court of Georgia or its designee, on application by the receiver, may order that the receiver shall be sole signatory on any such account to the extent necessary for the purposes of these Rules and may direct the disposition and distribution of client and other funds.

(3) In determining ownership of funds in the trust accounts, including by subrogation or indemnification, the receiver should act as a reasonably prudent lawyer maintaining a client trust account. The receiver may (i) rely on a certification of ownership issued by an auditor employed by the receiver; or (ii) interplead any funds of questionable ownership into the appropriate Superior Court; or (iii) proceed under the terms of the Disposition of Unclaimed Property Act (OCGA § 44-12-190 et seq.). If the absent lawyer’s trust account does not contain sufficient funds to meet known client balances, the receiver may disburse funds on a pro rata basis.

(e) Payment of Expenses of Receiver.

(1) The receiver shall be entitled to reimbursement for actual and reasonable costs incurred by the receiver for expenses, including, but not limited to, (i) the actual and reasonable costs associated with the employment of accountants, auditors, and bookkeepers as necessary to determine the source and ownership of funds held in the absent lawyer’s trust account, and (ii) reasonable costs of secretarial, postage, bond premiums, and moving and storage expenses associated with carrying out the receiver’s duties. Application for allowance of costs and expenses shall be made by affidavit to the Supreme Court of Georgia, or its designee, who may determine the amount of the reimbursement. The application shall be accompanied by an accounting in a form and substance acceptable to the Supreme Court of Georgia or its designee. The amount of reimbursement as determined by the Supreme Court of Georgia or its designee shall be paid to the receiver by the State Bar of Georgia. The State Bar of Georgia may seek from a court of competent jurisdiction a judgment against the absent lawyer or his or her estate in an amount equal to the amount paid by the State Bar of Georgia to the receiver. The amount of reimbursement as determined by the Supreme Court of Georgia or its designee shall be considered as prima facie evidence of the fairness of the amount, and the burden of proof shall shift to the absent lawyer or his estate to prove otherwise.

(2) The provision of paragraph (e) (1) above shall apply to all receivers serving on the effective date of this Rule and thereafter.

(f) Receiver-Client Relationship. With full disclosure and the informed consent, as defined in Rule 1.0 (n), of any client of the absent lawyer, the receiver may, but need not, accept employment to complete any legal matter. Any written consent by the client shall include an acknowledgment that the client is not obligated to use the receiver.

(g) Unclaimed Files.

(1) If upon completion of the receivership there are files belonging to the clients of the absent lawyer that have not been claimed, the receiver shall deliver them to the State Bar of Georgia. The State Bar of Georgia shall store the files for six years, after which time the State Bar of Georgia may exercise its discretion in maintaining or destroying the files.

(2) If the receiver determines that an unclaimed file contains a Last Will and Testament, the receiver may, but shall not be required to do so, file said Last Will and Testament in the office of the Probate Court in such county as to the receiver may seem appropriate.

(h) Professional Liability Insurance. Only lawyers who maintain errors and omissions insurance, or other appropriate insurance, may be appointed to the position of receiver.

(i) Requirement of Bond. The Supreme Court of Georgia or its designee may require the receiver to post bond conditioned upon the faithful performance of his duties.

(j) Immunity.

(1) The Supreme Court of Georgia recognizes the actions of the State Bar of Georgia and the appointed receiver to be within the Court’s regulatory function, and being regulatory in nature, the State Bar of Georgia and the receiver are entitled to that immunity customarily afforded to court-appointed receivers.

(2) The immunity granted in paragraph (j) (1) above shall not apply if the receiver is employed by a client of the absent lawyer to continue the representation.

(k) Service. Service under this Rule may be perfected under Rule 4-203.1.