Arnold, Matheny & Eagan represented Preclude, Inc., in a lawsuit that resulted in a $50,000 award. In an unrelated lawsuit, Preclude owed First American Holdings $26,000. First American got a court order to garnish funds held by Arnold, Matheny & Eagan for Preclude. But the law firm had already written a check to Preclude for its share of the award. Arnold, Matheny & Eagan told First American it did not have possession of any funds for Preclude. First American appealed, arguing that since the check to Preclude had not yet cleared the bank, the law firm did have possession of the funds and could have issued a stop-payment order. The Second District Court of Appeal agreed.