3Declaration of Trust—
Proposed Amendments
3Since Jan. 7, 1961, the Client
Protection Fund Declaration
of Trust has been amended
a number of times. Rule
32(d)( 8), ARIZ.R.S.CT.,
grants the State Bar Board of
Governors power to create and
maintain the CPF and amend
the Declaration of Trust.
3 The Declaration was last
amended and restated in its
entirety on May 30, 2008.
3Many of the proposed amendments merely correct or update
the Declaration, e.g., citations
to rules and the definition of
“lawyers.” Other changes are
substantive, and most deal with
claim processing procedures.
Those substantive changes
either clarify trust terms to
comport with existing practices
or to enhance existing procedures. The changes should take
effect Jan. 1, 2014, and apply
to all pending claims.
3 The Scope and Operations
Committee unanimously
payor of last resort.
3Lawyer must be suspended,
disbarred, deceased or a
convicted felon.
3Payments can be made no
sooner than six months from
when loss occurred; five-year
“statute of limitation” to file
a claim.
3 Payment caps:
$100,000/claim;
$250,000/lawyer.
3 The trust does not cover businesses (although the exception
is the mom-and-pop business
options) or fee dispute claims.
3Funded from $10 of each
member’s dues.
3Reserves accumulated over
years. $3 million in insured
CDs.
3Expenses over $100,000 per
year; trustees meet quarterly.
3Paid claims in 2013 estimated
at $200,000.
3Earnings on investments are
minuscule due to current
interest rates.
such action at the February
board meeting. The motion
failed due to the lack of a
second. The original motion
carried unanimously.
3Meeting adjourned for day
one.
Day Two—Dec. 13, 2013
• 8:30-9:00 a.m.—Meet and
Greet with the Staff
• 9:00 a.m.—Call to Order
3 President’s Report
3 President Cunningham
thanked board member Diane
Drain and her husband, Jay
McClimon, for opening their
home for the Board holiday
party.
3 CEO/ED Report—John
Phelps:
3Introduced Teri Baldonado,
Legal Secretary, Employee of
the Quarter—In addition to
her work in the Lawyer
Regulation Office, she has
worked on the staff’s Wellness
Committee, which has been
recognized by the Arizona
Wellness Council two years
in a row.
3Introduced Martin Gaxiola,
Accounting Manager,
Employee of the Year—He
has revolutionized the budget
process through his technological and accounting tools
acumen.
3Client Protection Fund—Chas
Wirken, chair of the CPF Board
of Trustees, reported:
3 The Fund is a separate entity
from the Bar; created by
Supreme Court Rule in 1961;
administered by five trustees:
Jim Penny, Treasurer, Tucson;
Rosemary Rosales, Chandler;
Bob Schmitt, Prescott; Maria
Hoffman, public member,
Fountain Hills; ably assisted
by staff: Karen Weigand, CPF
Administrator, Patricia Sallen,
Deputy General Counsel,
John Furlong, General
Counsel, and financial
assistance from CFO Kathy
Gerhart and Mr. Gaxiola.
