Legal Ethics Opinion No. 1373

  Real Estate Practice--Contracts: Settlement Attorney Escrowing
Real Estate Commission at Closing Due To Dispute Between Seller
and Broker/Seller's Agent

An attorney's practice consists, in large measure of, real estate
transactions.  The attorney is named in a contract of sale as the
settlement agent.  The contract provides that it is by and
between buyer and seller, through the real estate broker,
seller's agent, and it sets forth the amount of the real estate
commission payable to the broker.  Furthermore, the contract is
signed by all of the parties thereto, including the real estate
broker, and provides that the seller agrees to pay the real
estate commission due to broker, to instruct the settlement agent
to deduct the commission from the proceeds of sale and then pay
it over to the real estate broker.  

You indicate that, in the transaction in issue, prior to closing,
a dispute arises between seller and the real estate broker and
the seller advises the settlement attorney not to pay the real
estate commission.  You wish to know whether the settlement
attorney may escrow the real estate commission at closing despite
the broker's objection and insistence that the settlement take
place pursuant to the contract terms. 

The committee is of the opinion that the Code of Professional
Responsibility is inapplicable to the question you present since
the issue raises a legal question pertinent to the contract
dispute.  The resolution of legal disputes is beyond the purview
of the committee's authority and requires a determination by the
court as a finder of fact.

Committee Opinion
July 31, 1990