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Iacobellis v. Mainardi

A-6034-01T5 (N.J. Super. App. Div. 2003) (Unpublished)

ATTORNEYS; FIDUCIARY DUTY—An attorney who receives a check for a transaction, such as a closing, from a person other than the attorney’s client has a duty to inquire whether the check writer has an interest in the transaction.

In connection with a real estate closing, an attorney received a check from a person who was not his client. It was made payable to him “as attorney.” At the closing, he disbursed the funds without inquiring as to why the check was written in that fashion. Later, the check writer insisted that he was entitled to an interest in the property purchased by the attorney’s client and that the attorney should have known that he had an interest in the property when the check was written to him “as attorney.” The lower court and the Appellate Division agreed with the check writer. “The fiduciary obligation of the lawyer applies to persons who, although not strictly clients, he has or should have reason to believe rely on him.” According to each court, the attorney’s receipt of the funds “as attorney rendered him more than a ‘mere conduit’” and that “their disbursement without regard for protection of [the check writer’s] interests constituted an actionable violation of duty.”

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