August 6, 1996
A lawyer who purchases property of a former client at a sheriff's sale triggered when the lawyer executed a judgment against the former client for unpaid fees, is not required by ethics rules to pay the former client any excess of the value of the property over the amount of the judgment.
A lawyer obtained a $4,000 judgment against a client for unpaid fees and a court order to execute against ten acres of the client's property. At the sheriff's sale, the lawyer is the sole bidder in an amount $10,000 to $20,000 less than the value of the property. The client is notified of the proceeding and the redemption period, but does not redeem the property. At the expiration of the redemption period the sheriff executes a deed to the lawyer.
The lawyer asks if there is an obligation to pay to the client an amount equal to the value of the unredeemed property less the judgment and costs.
In this situation the client-lawyer relationship has ended. In the suit for unpaid fees the client and the lawyer are opposing parties. At the sheriff's sale, the lawyer is exercising rights of a creditor and citizen.
There is nothing in the Michigan Rules of Professional Conduct which requires a lawyer to reimburse the debtor for the excess value of the property over the judgment amount, even when that debtor is a former client.