Rule 1:20-19. Appointment of Attorney-Trustee to Protect Clients' Interest

(a) Jurisdiction; Appointment

(1) Regular Attorney-Trustee. If an attorney has been suspended or disbarred or transferred to disability-inactive status and has not complied with R. 1:20-20 (future activities of disciplined or disability-inactive attorneys), or has abandoned the law practice, or cannot be located, or has died, and no partner, shareholder, executor, administrator or other responsible party capable of conducting the respondent's affairs as stated hereinafter is known to exist, the Assignment Judge, or designee, in the vicinage in which the attorney maintained a practice may, on proper proof of the fact and on the application of any interested party, appoint one or more members of the bar of the vicinage where the law practice is situate as attorney-trustee. Where a responsible party capable of conducting respondent's affairs is known to exist, and where that person is a New Jersey attorney or has retained a New Jersey attorney, that attorney may be appointed and directed to take appropriate action. Notice of an order of appointment shall be given to the Director of the Office of Attorney Ethics and the secretaries of the appropriate Ethics Committee and Fee Committee and county bar association in the vicinage. (2) Temporary Attorney-Trustee. When, in the opinion of the Assignment Judge, an attorney is otherwise unable to carry on the attorney's practice temporarily so that clients' matters are at risk, the Assignment Judge, or designee, in the vicinage in which the attorney maintained a practice may, on proper proof of the fact and on the application of any interested party, appoint a temporary attorney-trustee for a period of up to six months following the same conditions and procedures set forth in subparagraph (a)(1) of this Rule. The purposes of the temporary attorney-trustee shall be to preserve, in so far as practical, the practice of the attorney and all attorney-client relationships pending a report to the Assignment Judge at 150 days after appointment as to the attorney's condition and ability to resume the practice. The Assignment Judge may then either dissolve the temporary attorney-trusteeship or convert it to a regular attorney-trusteeship as if created under subparagraph (a)(1) of this Rule. The temporary attorney-trustee shall have the powers and responsibilities authorized by the Assignment Judge, as well as those specifically granted above and those in paragraphs (c), (e) and (h). The temporary attorney-trustee shall not have the powers granted under paragraphs (d), (f) and (g), except that the reports required by paragraph (d) shall be filed. The temporary attorney-trustee shall not apply for legal fees within the first thirty days after appointment, but may at any time be awarded reasonable costs and expenses as stated under paragraph (h), including the right to satisfy those costs and expenses from the attorney's business or personal accounts as directed by the Assignment Judge. After thirty days from appointment, the temporary attorney-trustee may apply to the Assignment Judge for reduced legal fees below the normal hourly rate in accordance with paragraph (h). The attorney whose practice is subjected to a temporary trusteeship shall have the right to make application at any time for an order vacating the temporary trusteeship on notice to all interested parties.

b) Purposes; Inventory of Files, Trust and Other Assets. The purposes of the appointment shall be (1) to inventory active files and make reasonable efforts to distribute them to clients, (2) to take possession of the attorney trust and business accounts, (3) to make reasonable efforts to distribute identified trust funds to clients or other parties (other than the attorney), and (4) after obtaining an order of the court, to dispose of any remaining funds and assets as directed by the court. The attorney-trustee shall have no obligation or liability to the attorney. The attorney-trustee may take possession of the attorney's law practice and, in accordance with R.1:20-20(b)(13), all monies and fees due the attorney for the sole purpose of creating a fund for payment of reasonable fees, costs and expenses of the trusteeship as ordered by the court under paragraph (h).

(c) Protection of Client Information Any attorney-trustee shall not disclose any information contained in any files under this rule without the consent of the client to whom the file relates, except as necessary to carry out the order of appointment or to comply with any request from an Ethics Committee or the Director.

(d) Reports; Instructions The attorney-trustee shall file an initial report with the Assignment Judge or designee within 120 days after appointment and a final report prior to being discharged. The reports shall describe the nature and scope of the work accomplished and to be accomplished under this rule and the significant activities of the attorney-trustee in meeting the obligations under the rule. The final report must include accountings for any trust and business accounts, the disposition of active case files and any requests for disposition of remaining files and property. The attorney-trustee may apply to the Assignment Judge, or such other Judge as may be designated, for instructions whenever necessary to carry out or conclude the duties and obligations imposed by this rule.

(e) Immunity All attorney-trustees appointed pursuant to this rule shall be immune from liability for conduct in the performance of their official duties in accordance with R. 1:20-7(e). This immunity shall not extend to employment under section (f).

(f) Acceptance of Clients With the consent of any client, the attorney-trustee may, but need not, accept employment to complete any legal matter.

(g) Legal Responsibility of Attorney The attorney for whom an attorney-trustee has been appointed is liable to the attorney-trustee for all fees, costs, and expenses reasonably incurred by the attorney-trustee as approved by the court under paragraph (h).

(h) Legal Fees, Costs, and Expenses The attorney-trustee shall be entitled to reimbursement from the attorney for (1) actual expenses incurred by the attorney-trustee for costs, including, but not limited to, reasonable secretarial, paralegal, legal, accounting, telephone, postage, moving and storage expenses, and (2) reasonable hourly attorneys' fees. Application for allowance of fees, costs, and expenses shall be made by affidavit to the appointing judge, or designee, who may enter a judgment in favor of the attorney-trustee against the attorney. The application shall be accompanied by an accounting in a form and substance acceptable to the court. The application shall be made on notice to the attorney or, if deceased, to the attorney's personal representative, or heirs. For good cause shown, an interim application for costs and legal fees may be made. The attorney-trustee shall be accorded a priority as an administrative expense for all attorney fees, costs, and expenses awarded by the court. If, after paying the attorney-trustee, there are funds or assets remaining, the Assignment Judge or designee may make such order of disposition as may be appropriate.