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36th St. Co., 825 P.2d 949, 951 (Ariz. Ct. App. 1991), it was
held that under Arizona Rules of Professional Conduct attorneys
are not permitted to acquire proprietary interests in funds
recovered on behalf of their clients until after the judgments
are rendered. 17A Ariz. Rev. Stat. Sup. Ct. Rules, 42 Prof.
Conduct, ER 1.8(j)(1985); see also State Farm Mut. Ins. Co. v.
St. Joseph's Hosp., 489 P.2d 837, 840-841 (Ariz. 1971), which
held that Arizona attorneys have no right to attorneys' liens
against funds recovered on behalf of their clients until after
judgments are rendered or settlements are entered into.
It thus appears that, in Arizona, attorneys do not have the
same substantive rights in funds recovered on behalf of their
clients as do attorneys in Alabama. In Arizona, the total funds
recovered constitute property of the clients. Based on the
foregoing, this case is distinguishable from Cotnam v.
Commissioner, supra, decided by the Court of Appeals for the
Fifth Circuit.
In the Glass and Stephens class actions, the documentation
is extensive to the effect that petitioner was entitled to and
received an award of $862,906, one-third of which was then used
to pay the $273,573 portion of the attorney's contingency fees
for which petitioner was obligated.
Petitioners rely on Eirhart v. Libbey-Owens-Ford Co., 726
F. Supp. 700 (N.D. Ill. 1989), in which it was held that the
defendant need not file information returns with respondent
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