In the Matter of Darryl J. Ferguson

Darryl Ferguson, a personal injury lawyer, signed documents called 'Notice of Doctor's Lien' promising to pay a chiropractor from any settlement he won for two clients who received chiropractic treatment. When Ferguson settled both cases in 2019, his clients told him not to pay the chiropractor, and Ferguson concluded the document was an attempt at a lien that Georgia law did not allow chiropractors to use at that time, so he paid his clients instead and disregarded the chiropractor's claim. The State Bar charged Ferguson with violating rules requiring lawyers to protect third parties' interests in settlement funds. A special master and a disciplinary review board both concluded he violated the rules and recommended a suspension. The Supreme Court of Georgia disagreed, holding that Ferguson reasonably concluded he had a valid legal defense to the chiropractor's claim, so the Bar failed to prove any rule violation. One justice dissented, arguing the agreement was an enforceable contractual lien.

The court held that the State Bar failed to prove by clear and convincing evidence that Ferguson violated Rule 1.15(I) because it was reasonable for him to conclude the chiropractor's claim was limited to an unperfected statutory lien, a valid defense allowing him to disregard her interest, and no separate obligations arose under the related notice and segregation rules once that interest was properly disregarded.

The ruling clarifies that Georgia lawyers who reasonably conclude a third party's claimed interest in settlement funds has a valid legal defense can rely on that conclusion without facing discipline, which affects how personal injury attorneys handle medical providers' liens and payment agreements statewide.

No discipline imposed, case dismissed

1. The court reviewed the disciplinary rule, Rule 1.15(I)(b), which lets a lawyer disregard a third party's claimed interest in settlement funds if the lawyer reasonably concludes there is a valid defense to it, such as an unperfected lien.
2. Reading the 'Notice of Doctor's Lien' document as a whole rather than isolated phrases, the court found its title and references to a 'lien' supported Ferguson's view that the chiropractor's claim was tied to a statutory lien, a type of legal claim created by a specific Georgia law that requires formal steps to become enforceable.
3. Because Georgia law at the time did not let chiropractors use that statutory lien process, and the chiropractor never took the steps to perfect one, the court found it reasonable for Ferguson to conclude he had a valid defense and could disregard her claim.
4. The court then addressed whether Ferguson still owed duties to notify or set aside funds for the chiropractor under related rules, concluding that once an interest can be lawfully disregarded under Rule 1.15(I)(b), those separate notice and fund-segregation requirements do not independently apply to that same interest.
5. Because the Bar carries the burden of proving rule violations by clear and convincing evidence, and it did not disprove Ferguson's reasonable defense theory, the court concluded no violation of any part of Rule 1.15(I) was shown.

• attorney discipline
• chiropractor lien dispute
• settlement funds
• State Bar of Georgia
• doctor's lien agreement