Rule 17A-010. Eligible claims.

A. Conduct required. The loss must be caused by the dishonest conduct of the lawyer and shall have arisen out of and by reason of a client-lawyer relationship or a fiduciary relationship between the lawyer and the claimant. B. Notice of claim. The claim shall have been filed no later than five (5) years after the claimant knew or should have known of the dishonest conduct of the lawyer. C. Definition. As used in this rule, “dishonest conduct” means wrongful acts committed by a lawyer in the nature of theft or embezzlement of money or the wrongful taking or conversion of money, property, or other things of value, including but not limited to (1) failure to refund unearned fees received in advance as required by the New Mexico Rules of Professional Conduct; and (2) the borrowing of money from a client without intention to repay it or with disregard of the lawyer’s inability or reasonably anticipated inability to repay it. D. Except as provided by Paragraph E of this rule, the following losses shall not be reimbursable: (1) losses incurred by spouses, children, parents, grandparents, siblings, partners, associates, and employees of lawyers causing the losses; (2) losses covered by a bond, agreement, or insurance contract to the extent covered thereby, including any loss to which any bonding agent, surety, or insurer is subrogated, to the extent of that subrogated interest; (3) losses incurred by any financial institution that are recoverable under a “banker’s blanket bond” or similar commonly available insurance or surety contract; (4) losses incurred by any business entity controlled by the lawyers, any person, or entity described in Subparagraph (D)(1), (2) or (3) of this rule; (5) losses incurred by any governmental entity or agency; (6) losses arising from business or personal investments not arising in the course of the client-lawyer relationship; and (7) consequential or incidental damages, such as lost interest, lawyer’s fees, or other costs incurred in seeking recovery of a loss. E. Payment considerations. In determining whether to pay a claim, the commission should consider the following factors: (1) the funds into which the lawyer is required to pay an annual assessment or into which an appropriation is made on behalf of the lawyer by the bar association or court; (2) the domicile of the lawyer; (3) the domicile of the client; (4) the residence of the lawyer; (5) the jurisdictions in which the lawyer is licensed and the number of years in each; (6) the location of the lawyer’s principal office; (7) whether the lawyer maintains offices in other jurisdictions and, if so, where; (8) the location where the attorney-client relationship was formed; (9) the primary location where the legal services were provided; (10) whether at the time the legal services were rendered the lawyer was engaged in the unauthorized practice of law in the jurisdiction in which services were provided; (11) whether the lawyer had the authority to offer or provide the services that led to the claim without being licensed in this jurisdiction; (12) whether the claimant has filed a claim with another jurisdiction’s fund and whether that fund has or will pay some or all of the claim under its rules; and (13) any other significant factors as determined by the commission, including but not limited to contacts by the lawyer or client with this and any other jurisdiction in which the primary services were rendered. F. Payment by other jurisdictions. The commission may, in its discretion enter into an agreement with the fund of another jurisdiction to pay a portion of a claimant’s reimbursable loss that is eligible for payment by both funds taking into account the factors set forth in Paragraph E of this rule, and the rules applicable to the fund of the other jurisdiction. G. Hardship exception. In cases of extreme hardship or special and unusual circumstances, the commission may, in its discretion and consistent with the purpose of the fund, recognize a claim which would otherwise be excluded under these rules. H. Unjust enrichment. If it appears that there will be unjust enrichment, or a claimant unreasonably or knowingly contributed to the loss, the commission may, in its discretion, deny the claim.