1 ATTORNEY'S LIENS: APRACTICAL OVERVIEW I. INTRODUCTION The practice of law requires the lawyer to function in at least two major roles: as an attorney and advocate, and as a business person. As such, the lawyer confronts on a daily basis the dual challenge of practicing law with expertise while at the same time earning a living. Consequently, a legitimate and constant concern of lawyers is how to collect fees in a manner consonant with the practice of law as a learned profession.' When faced with the problem of fee collection, several remedies are available to the attorney. The attorney can negotiate a settlement, bring a separate suit, s employ an outside collection 1. Fee collection is a recurring problem at two stages of representing a client: prior to litigation or resolution of the problem and subsequent to litigation. In the first situation, most frequently the client discharges the attorney or the attorney chooses to withdraw and the client refuses to pay. In the second situation, the client refuses to pay after the attorney has represented the client in litigation and has obtained a judgment for the client. The early English and American courts differed sharply in their attitude towards fees. In the English courts lawyers were not allowed to maintain an action for fees. The view, as expressed by Blackstone, was that a fee was a mere gratuity which a counselor could not demand without doing injury to his reputation. See 1 W. BLACKSTONE, COM- MENTARIES 630 (G. Chase 3d ed. 1906). However, in the United States, such an attitude did not exist, as exemplified in the unanimous decision of Adams v. Stevens & Cagger, 25 Wend. 451 (N.Y. 1841). In Adams, the attorney was allowed to recover the fee as compensation beyond the nominal counsel fee established by the legislature where the client had agreed to pay a specific amount or the reasonable worth of the services. Id. at 457. The Adams court concluded that viewing counsel fees as merely honorary and gratuitous was inconsistent with "our utilitarian policy and practical notions; it has never been recognized in our country, and is in opposition to the general tenor of our laws." Id. at See, e.g., National Sales & Serv. Co. v. Superior Court, 136 Ariz. 544, 667 P.2d 738 (1983) (en banc) (attorneys and clients are encouraged to negotiate and compromise in fee disputes). 3. Id. at -, 667 P.2d at 745 (Cameron, J., dissenting) (an attorney owed a fee is not without sufficient remedy in that the attorney, like any creditor, is free to pursue payment of the debt through a separate action). See Ross v. Wells, 6 Ill. App. 2d 304, 127 N.E.2d 519 (1955) (where a lawyer brought suit against former clients to recover attorney's fees, and the court issued a subpoena duces tecum requiring production of the
2 BRIDGEPORT LAW REVIEW [Vol. 6:77 agency,' or assert an attorney's lien, 5 either a retaining lien on the client's papers 6 or a charging lien on a favorable judgment. 7 As a remedy, both liens have presented complex problems for nearly two centuries" for the courts, attorneys, and clients., client's papers). Cf. Jenkins v. District Court, - Colo. -, 676 P.2d 1201 (1984). In an action for negligence brought by the client against the attorney, the attorney counterclaimed for attorney's fees and expenses. Id. at -, 676 P.2d at The attorney brought a separate suit challenging a court order to produce the client's papers, claiming that the order was a violation of the statute on attorney's liens. Id. See also Burk v. Burzynski, - Wyo. -, 672 P.2d 419 (1983). In Burk, attorneys brought suit against a former client for past-due legal fees. The Burk court found that the attorneys were entitled to the fees and costs subject to an offset of any recovery on the claim assigned by the client. Of interest is the court's ruling that the assignment creating a security interest was valid under DR 5-103(A) of the Model Code of Professional Responsibility, which grants an attorney a lien to secure his fee. Id. at -, 672 P.2d at Informal discussion with practicing attorneys indicates that some attorneys contract with outside collection agencies to secure reimbursement of outstanding client debts, while others who fail to collect a fee through customary billing procedures simply abandon the effort. No statistics are presently available on what percentage of clients fail to pay their legal fees. 5. For a widely accepted definition of attorney's liens in general, see Everett, Clarke & Benedict v. Alpha Portland Cement Co., 255 F. 931, 927 (2d Cir. 1915). For discussion of the liens distinctive to the legal profession, see S. M. SPEISER, ArORNEYS FEES, Attorney's Liens, 16:1-16:51 (1973) [hereinafter cited as SPEISER] which provides an in-depth discussion of attorney's liens. See also JONES, THE LAW OF LIENS (3d ed. 1914) [hereinafter cited as JONES]; Britton, Attorneys' Retaining Liens, 6 J. LEGAL PROP. 263 (1981) [hereinafter cited as Britton]; Wentworth, Attorneys' Liens - A Survey and a Proposal, 35 CONN. B.J. 191 (1961) [hereinafter cited as Wentworth]; Note, An Attorney's General or Retaining Lien, 20 AM. L. REv. 727 (1886) [hereinafter cited as Note, General or Retaining Lien]; Note, Attorney's Retaining Lien over Former Client's Papers, 65 COLUM. L. REv. 296 (1965) [hereinafter cited as Note, Attorney's Retaining Lien]; Note, Attorney's Liens, 14 OR. L. REv. 536 (1935) [hereinafter cited as Note, Attorney's Liens]. See generally 7 Am. JUR. 2D Attorney's Liens 7 (1980). 6. For a discussion of retaining liens, see infra text accompanying notes For a discussion of charging liens, see infra text accompanying notes For a discussion of the historical roots of attorney's liens, see infra text accompanying notes See Morse v. District Court, 65 Nev. 275, 195 P.2d 199 (1948). The Morse court apparently felt compelled to deal at length with the history and distinguishing features of both liens because the parties failed to understand the nature of the liens. The court stated that "[tihe very obvious confusion into which the parties fall... results from their failure to distinguish clearly between a general or retaining lien and a special or charging lien." Id. at, 195 P.2d at 202. See also Hazeltine v. Keenan, 54 W. Va. 600, 46 S.E. 609 (1904) where the court resolved the dispute between attorney and client by finding that the attorney had neither a charging lien "because the notes constituting the fund were not covered in a suit," nor a retaining lien because the attorney had voluntarily transferred the notes. Id. at 605, 46 S.E. at For a discussion of more recent cases in which the complexities of the lien were at issue, see Adams, George, Lee, Schulte & Ward v. Westinghouse, 597 F.2d 570 (5th Cir. 1979), discussed at infra note 203 and accompanying text; In re Kaufman, 93 Nev. 452,
3 1985] ATTORNEY'S LIENS This Note will explore the complexities of both kinds of liens and will provide practical guidelines for attorneys who may choose to exercise the liens. 10 A brief description and historical overview" of the liens will be provided, and the nature and scope of these liens as they exist presently in Connecticut and in other jurisdictions will be analyzed. The principal cases of Connecticut will be discussed in relation to" the Formal and Informal Opinions of the Connecticut Bar Association (CBA), and in view of the modern trend toward limiting the liens, even where they are allowed statutorily. Ethical considerations outlined in the Model Code of Professional Responsibility and elucidated in 567 P.2d 957 (1977). See also Donaldson, Hoffman & Goldstein v. Guadio, 260 F.2d 333 (10th Cir. 1958) (noting the distinction between the two liens and finding that the possessory lien did not create an equitable charge which would follow the proceeds of a settlement and allow a charging lien). 10. Attorney's liens in the paper are examined with an eye to utilization purposes, i.e., when and how an attorney may assert either lien. For a state court decision illustrating the reasoning courts typically employ to sort out the attorney's rights, see Armstrong v. Zounis, 304 Ill. App. 537, 26 N.E.2d 670 (1940) (where retaining lien was impressed upon deeds of client, the attorney had no right to foreclose attorney's lien on the realty through a sale). It should be noted that, while attorney's liens are most often categorized and discussed separately in this and other research articles, the liens are not mutually exclusive. For a decision which allowed both liens to the attorney, see Borup v. National Airlines, 159 F. Supp. 808 (S.D.N.Y. 1958) (retaining lien on papers allowed along with a charging lien on the client's action in a personal injury suit). 11. For a discussion of the historical aspects of the liens, see infra notes and accompanying text. Perhaps the earliest discussion of an attorney's lien appears in Ex parte Bush, 7 Vin. Abr. 74, 22 Eng. Rep. 93 (Ch. 1734). In Ex parte Bush, Lord Chancellor Talbot enforced an attorney's lien upon papers, stating: "[tihe attorney hath a lien upon the papers in the same manner against the bankrupt, and though it does not arise by any express contract or agreement, yet it is as effectual, being an implied contract in law." Id. at 75, 22 Eng. Rep. at 94. Later, Lord Mansfield referred in dicta to the existence of an attorney's lien in Wilkins v. Carmichael, 1 Dougl. 101, 99 Eng. Rep. 70 (1779). It can be concluded that by the end of the eighteenth century the practice of protecting an attorney by a lien upon the papers and monies of the client was an established one, as evidenced by Lord Mansfield's comment: [Tihe practice [of retaining papers]...was not very ancient, but... was established on general principles of justice, and... courts, both of law and equity, have now carried it so far that an attorney or solicitor may obtain an order to stop his client from receiving money recovered in a suit in which he has been employed by him until the bill is paid. Id. at 102, 99 Eng. Rep. at 72. In the same year, in Welsh v. Hole, 1 Dougl. 238, 99 Eng. Rep. 155 (1779), a case directly involving the question of an attorney's lien, Lord Mansfield again affirmed the existence of the retaining lien. In Connecticut, most of the relevant case law dates back to the 1800's. Two leading Connecticut cases are Cooke v. Thresher, 51 Conn. 105 (1883), and Andrews v. Morse, 12 Conn. 444 (1838).
4 BRIDGEPORT LAW REVIEW [Vol. 6:77 current court decisions will also be examined. II. ATTORNEY'S LIENS Attorney's liens are classified into two categories: 12 the general retaining lien, 18 and the special or charging lien.' The retaining lien allows an attorney to withhold a client's papers, documents, or money as security for any fees and costs owed by the client to the lawyer. 1 5 The charging lien, by contrast, attaches to any judgment recovered by the attorney. 16 These protective liens, specifically available only to attorneys, were developed at common law. Today, the right of an attorney to a lien is fixed by state law. While a majority of states have codified these common law attorney's liens, 8 Connecticut 12. See Weed Sewing Mach. Co. v. Boutelle, 56 Vt. 570, 48 Am. Rep. 821 (1884) (attorney's liens are of two kinds, a possessory or retaining lien and a charging lien). See also Jovan v. Starr, 87 Ill. App. 2d 350, 231 N.E.2d 637 (1967) (recognizing two kinds of attorney's liens); Smyth v. Fidelity and Deposit Co., 125 Pa. Super. 597, 190 A. 398 (Pa. Super. Ct. 1937), aff'd, 326 Pa. 391, 192 A. 640 (1938). In Smyth, the court stated that "[a]ttorneys' liens existing at common law are divided into two distinct classes - the general or 'retaining' lien, i.e., the right of the attorney to refuse to surrender documents, papers, etc., belonging to his client, and the 'charging lien,' or the right to be paid out of a fund or judgment which he has been instrumental in recovering for his client." Id. at 601, 190 A. at 401. In a recent Alaska case, the attorney claimed both a retaining lien on papers in his possession and a charging lien on any recovery ultimately received by the client. Miller v. Paul, 615 P.2d 615, 617 (Alaska 1980). For a discussion of factors to be considered on security for release of a file, see infra note For a definition of the general retaining lien, see R. A. BROWN, A TREATISE ON THE LAW OF PERSONAL PROPERTY 109; RESTATEMENT OF SECURITY 62 (1941); 2 SPEISER, supra note 5, at 16: For a general definition of the special or charging lien, see RESTATEMENT OF SECURITY 62 (b) comments a & j (1941). Courts have made judicial determinations on the charging lien for nearly two centuries. For a discussion of applicable case law, see infra notes & See Morse, 65 Nev. at , 195 P.2d at 202 (recognizing that the special lien, unlike the retaining lien, does not depend upon the attorney's possession of the client's property). 16. Welch v. Hole, 1 Dougl. 238, 99 Eng. Rep. 155 (1779) (the first definition of the charging lien); Andrews v. Morse, 12 Conn. 444 (1838) (the attorney has a lien on the judgment and execution for his services and disbursements which will be protected by courts of law and equity). Cf. Midvale Motors, Inc. v. Saunders, 21 Utah 2d 181, 442 P.2d 938 (1968) (charging lien was denied because the client had no judgment in his favor, and, as a consequence, there was no "fruit" from the attorney's labor to which the lien could attach). 17. Sharar v. Pollia, 191 F.2d 116 (10th Cir. 1951) (in accepting the general view that lien rights are fixed by state law, Wyoming court would not analyze cases cited from other jurisdictions). 18. See Wentworth, supra note 5, at 191 (most states have codified these common-
5 1985] ATTORNEY'S LIENS has never enacted legislation allowing either a retaining or a charging lien.'" More importantly, the CBA, although recognizing the common law charging lien, has definitively stated that no common law retaining lien exists in Connecticut. s0 Case law in law liens). See, e.g., the two statutes enacted by the Colorado General Assembly creating two types of liens: COLO. REv. STAT & (1973). See also Collins v. Thuringer, 92 Colo. 433, 21 P.2d 709 (1933). While the Collins court expressed regret that the statute on attorney's liens did not delineate the two classes more clearly, it held that the legislature intended to preserve the distinction. Id. at -, 21 P.2d at There is a variety in the state statutes. In analyzing the various state statutes, Wentworth made the following observations in Wentworth, supra note 5, at While some statutes provided the attorney with a retaining lien for the general balance of compensation, other statutes did not mention the general balance. Some statutes allowed liens on paper which comes to the attorney in his or her professional employment; others upon causes of action; and "[slome statutes extended the lien to cover money in the possession of the adverse party once notice of the lien has been given." Id. at 200. A number of statutes provided for a charging lien once the proper form of notice had been given; other statutes provided that no notice was required since commencement of the suit automatically creates a lien. For more information on statutes on attorney's liens in individual states, see generally Wentworth, supra note 5; Stevens, Our Inadequate Attorney's Lien Statutes-A Suggestion, 31 WASH. L. REV. 1 (1956). For further discussion of statutory considerations, see infra note Vermont also has no attorney's lien statute. The only state which does statutorily authorize attorney's liens in the Second Circuit is New York. See N.Y. JUD. LAw 475 (McKinney 1983). While there is no Connecticut statute on attorney's liens, Connecticut has enacted legislation regarding liens in general. See CONN. GEN. STAT (a)-49-92(f) (1983). The state has also made statutory provisions for several specific kinds of liens. See, e.g., CONN. GEN. STAT (1983) (hotel keepers); CONN. GEN. STAT (1983) (animal keepers); CONN. GEN. STAT (1983) (clothing storage or cleaning). The most extensive Connecticut legislation in this area regards both mechanics liens, CONN. GEN. STAT to (1983) (attachment of real property to recover for labor and materials), and judgment liens, CONN. GEN. STAT to (1983) (providing that a judgment creditor may place a lien for his judgment on real estate of the debtor, which in effect creates a statutory mortgage). For Connecticut case law relating to specific liens, see Fishell v. Morris, 57 Conn. 552, 18 A. 717 (1889) (CONN. GEN. STAT giving a lien to a keeper of horses and cattle was lost when the horse was sold while out of the keeper's possession); Beardsley v. Beecher, 47 Conn. 408 (1879) (because the lien on land attached in a suit in which the judgment rendered was a statutory mortgage, the lien was not dissolved by insolvency proceedings on the part of the debtor). The Connecticut Supreme Court reaffirmed the validity of the Beardsley decision in City Nat'l Bank of Conn. v. Traffic Eng'g Ass'n, 166 Conn. 195, 348 A.2d 637 (1973) (holding that judgment lien on realty was not invalid because lien was filed after a judgment of foreclosure by sale). 20. CBA Comm. on Professional Ethics and Grievances, Formal Op. 31 at 58 (1978). The charging lien has been allowed in Connecticut. See, e.g., Cooke, 51 Conn. at 105 (attorney may assert special or charging lien against a judgment fund which he had produced when the client had agreed that he should have the lien). A more contemporary Connecticut case on liens is Walker v. Hartford Realization Co., 74 F.2d 56 (2d Cir. 1934) (bill to impress lien in favor of attorney on assets of corporation states a cause of action).
6 BRIDGEPORT LAW REVIEW [Vol. 6:77 Connecticut is inconclusive as to the existence of a retaining lien." 1 A. Historical Overview The first use of liens can be traced to the historical Jewish legal practice of the shetar, a written credit agreement, which was introduced into the English legal system following the Norman Conquest. 2 The concept of a lien allowing a creditor to proceed against the goods and land of a defaulted debtor 23 was alien to English law, since Christian creditors were not permitted to have rights in land they did not possess. 2 4 The incorporation of this concept into English practice radically changed the socio-economic basis of feudal society and established the power of liquid wealth in place of land holding. 5 Later, the common law recognized liens, such as the lien of an inn-keeper on a guest's chattels. 26 Historically, the retaining lien was first discussed in a 1734 case, 2 7 but the exact date on which the charging lien originated is not readily ascertainable because the lien first arose as a mere 21. There is no recent holding which would support the existence of a retaining lien doctrine. See Andrews, 12 Conn. at 446. "We do not say, nor do we believe, that attorneys in any case have a lien upon the judgments and papers of their clients similar to that which manufacturers and others have upon goods and moneys in their hands." Id. But see Hagearty v. Burns, 4 Conn. Supp. 505, affd sub. nom. Hagearty v. Ryan, 123 Conn. 372 (1937) (where the superior court stated that the attorney's lien recognized in this state is a retaining lien). Id. at See generally Shapiro, The Shetar's Effect on English Law-A Law of the Jews Becomes the Law of the Land, 71 Gao. L.J (1983) (discussing the historical development of the lien on property). 23. See J. RABINOWITZ, JEWISH LAW (1956). 24. See F. POLLOCK & F. W. MAITLAND, THE HISTORY OF ENGLISH LAW BEFORE THE TIME OF EDWARD I 469 (reissued 2d ed.). 25. See H. G. RICHARDSON, THE ENGLISH LAW UNDER ANGEVIN KINGS 94 (1960). 26. See JONES, supra note 5, at See Ex parte Bush, 7 Vin. Abr. at 74, 22 Eng. Rep. at 93. Four decades after Ex parte Bush was decided, Lord Mansfield referred in dicta to the existence of an attorney's lien. See Wilkins v. Carmichael, 1 Dougl. 101, 99 Eng. Rep. 70 (1779), holding that the captain of a ship had no lien upon the ship for his wages. The attorney for the defendant-captain analogized his client's position to that of attorneys "who cannot be compelled to deliver up the deeds and papers of their clients, till they are paid." Id. at 102, 99 Eng. Rep. at 72. Later in the same year, Lord Mansfield decided Welsh v. Hole, 1 Dougl. 238, 99 Eng. Rep. 155 (1779), a case which directly involved the question of whether or not an attorney had a lien on money recovered by his client for his bill of costs.
7 19851 ATTORNEY'S LIENS request by the attorney to be paid out of the proceeds of the judgment. 25 However, the charging lien appears to have existed in England prior to 1789, as did the retaining lien. 29 The liens, first established in equity, were later recognized at law. Today both liens exist either by legislation or by judicial decision in almost every jurisdiction." 0 The Connecticut courts have recognized the charging lien several times,"' most notably in the early case of Andrews v. Morse. 3 2 B. The General or Retaining Lien 1. Nature of the Lien Possession is the key element of the general lien 3 and is the most significant feature distinguishing it from the charging lien, which attaches to a judgment fund not in the attorney's hands." Because the lien has always been regarded as "passive," a mere right of retainer, 36 the lien cannot actively be enforced." The 28. See Note, Attorney's Liens, supra note 5, at 542. For a discussion of judicial attitudes regarding attorney's fees, see supra note Welsh v. Hole, 1 Dougl. 238, 99 Eng. Rep. 155 (1779) (attorney has lien on money recovered by his client for his bill of costs). See also Wilkins v. Carmichael, 1 Dougl. 101, 99 Eng. Rep. 70 (1979), where Lord Mansfield observed "that an attorney or solicitor may obtain an order to stop his client from receiving money recovered in a suit in which he had been employed... until the bill is paid." Id. at 104, 99 Eng. Rep. at 72; JONES, supra note 5, at For discussion of statutory considerations, see supra notes and infra note On the question of set-off against an attorney's lien, the leading case in Connecticut was decided in See Rumrill v. Huntington, 5 Day 163 (1811), discussed at infra note 154 and accompanying text Conn. 444 (1838). 33. For recent cases describing the essential elements of an attorney's lien, see, e.g., In re Southwest Restaurant Sys., 607 F.2d 1243 (9th Cir. 1979), cert. denied, 444 U.S (1980); United States v. J. H. W. & Gitlitz Deli & Bar, 499 F. Supp (S.D.N.Y. 1980). See also Nichols v. Pool, 89 Ill. 491 (1978) (possession of papers is indispensable and voluntary surrender of papers releases the lien); Northrup v. Hayward, 102 Minn. 307, 113 N.W. 701 (1907) (dictum) (lien is divested upon surrender to the owners of the property in possession); Hazeltine, 54 W. Va. at 605, 46 S.E. at 611 ("The very life of the lien depends on the continued retention of the article, because the lien is in terms and nature a thing fastening itself on the very thing itself."). See generally JONES, supra note 5, at For discussions of the general characteristic of the retaining lien, see Lustig, Attorney's Liens, 7 CLEv.-MAR. L. REV. 502 (1958); Note, Attorney vs. Client: Lien Rights and Remedies in Tennessee; 7 MEM. ST. U.L. REv. 435 (1977). 35. See Frazee v. Frazee, 104 Idaho 463, 660 P.2d 928 (1983). The court stated that "[s]uch a retaining lien is passive and not enforceable for foreclosure and sale." Id. at
8 BRIDGEPORT LAW REVIEW [Vol. 6:77 essence of the lien is nothing more than a right to retain the client's property until the client pays. s7 As a consequence of its passivity, the lien's effectiveness is directly related to the degree of embarrassment, worry or inconvenience caused to the client. 3 " If the papers or property are of slight or no value to the client, the force of the lien will be minimal or valueless. 39 Conversely, if the client's property has considerable value, the potential effectiveness of the lien will be enhanced. 2. Scope of the Lien The scope of the lien has expanded to cover almost all pa- 464, 660 P.2d at 929 (citing Ross v. Scannell, 97 Wash. 2d 598, -, 647 P.2d 1004, 1008 (1982)). See also Attorney Grievance Comm'n. v. McIntire, 286 Md. 871, 405 A.2d 273 (1978) (dictum) (attorney's lien is passive and cannot be enforced either at law or in equity); Note, General or Retaining Lien, supra note 5, at 727 (attorney's lien is a passive lien). 36. For the proposition that the lien will not be enforced by court order, see generally Lazenby v. Codman, 116 F.2d 607 (2d Cir. 1940) (retaining lien cannot actively be enforced); The Flush, Bulk Oil Transp., Inc. v. Robins Dry Dock & Repair Co., 277 F. 25 (2d Cir. 1921), cert. denied, 257 U.S. 657 (1922); In re Wilson, 12 F. 235 (S.D.N.Y. 1882); Modern Woodman of Am. v. Cummins, 216 Mo. App. 404, 268 S.W. 383, (1924) (lien will not be enforced by court order); In re Heinshemer, 214 N.Y. 361, 108 N.E. 636 (1915). For treatises on the subject, see 2 E. THORNTON, ATTORNEYS AT LAW 575 (1914); Annot. 111 A.L.R. 481, 487 (1937). 37. See SPEISER, supra note 5, at 16: See the leading case, often cited as The Flush, 277 F. at 25, cert. denied, 257 U.S. 657 (1922). The court denied the client the right to inspect papers held by the attorney, stating that "[i]f the client is given the right to inspect the papers or to compel their production while the lien continues, it certainly impairs the value of the lien, as it diminishes the embarrassment caused by the attorney's retention of them, and might make them valueless to the attorney, and the lien nugatory." Id. at 31. See also Wentworth, supra note 5, at 192 (the only leverage is the possible inconvenience caused to the client); SPEISER, supra note 5, at 379 (noting that "[tihe only advantage an attorney gains from his retaining lien is the possibility of forcing his client to settle because of embarrassment, inconvenience, or worry."). 39. It has been suggested that a retaining lien has nothing more than nuisance value. See Note, Attorney's Liens, supra note 5, at 540. For case law citing the same proposition, see United States v. Smith, 670 F.2d 915 (10th Cir. 1982). The Smith court, acknowledging that the attorney's retaining lien inconvenienced the clients, allowed the lien. Said the court: "If we were to hold the lien must give way because it hampers the clients' defense of their suits, we would emasculate the retaining lien as it applies to general balances due." Id. at 920. See also In re San Juan Gold, Inc., 96 F.2d 60 (2d Cir. 1938) (attorney's lien cannot be disregarded merely because the pressure it is supposed to exert becomes effective); Brauer v. Hotel Assoc. 40 N.J. 415, 192 A.2d 831 (1963) (effectiveness of the lien is proportionate to the inconvenience of the client denied access to the property).
9 1985] ATTORNEY'S LIENS pers of the client 40 and has been asserted against different kinds of property. 41 The lien is effective to secure all of the debts owed the attorney by the client, regardless of whether the debts are charged against the particular papers being retained. 42 In effect, the lien is on the "general balance" due for all legal services.' An attorney asserting such a lien can retain all of the client's papers in order to recover fees and costs owed for any work performed." While the lien has expanded with time to cover more property and debts owed, the retaining lien has also been restricted by courts in several ways. For instance, it is available only to the attorney of record. 4 5 Attorneys can retain only those papers that 40. See Note, Attorney's Retaining Lien, supra note 5, at 301 for a discussion of specific materials covered. See also Brauer, 40 N.J. at _. 192 A.2d at 833. See generally 7 Am. JUR. 2D 273, 276 (1963). 41. See, e.g., McPherson v. Cox, 96 U.S. 404 (1877) (a bond); Habegger v. Kipp, 96 Minn. 456, 105 N.W. 489 (1905) (a mortgage); Stewart v. Flowers, 44 Miss. 513 (1871) (a letter and a deed); Leviten v. Sandbank, 291 N.Y. 352, 52 N.E.2d 898 (1943) (stock certificates); Jackson v. Erkins, 131 A.D. 801, 116 N.Y.S. 385 (1909) (leases); In re Stenton, 53 Misc. 515, 105 N.Y.S. 295 (Sup. Ct. 1907) (bankbooks); Mathot v. Triebel, 98 A.D. 328, 90 N.Y.S. 903 (1904) (a contract); In re Sweeney, 86 A.D. 547, 83 N.Y.S. 680 (1903) (an insurance policy); Hazeltine v. Keenan, 54 W. Va. 600, 46 S.E. 609 (1904) (a promissory note); Kusterer v. City of Beaver Dam, 56 Wisc. 471, 14 N.W. 617 (1883) (a retainer contract). 42. See, e.g., Borup, 159 F. Supp. at 810 (lien exists if any fee owed and continues during litigation over the amount owing); Morfeld v. Andrews, - Wyo. -, 579 P.2d 426 (1978) (attorney entitled to retaining lien to recover the reasonable value of services); Goldman v. Rafel Estates, Inc. 269 A.D. 647, 58 N.Y.S.2d 168 (1945); Bowling Green Say. Bank v. Todd, 52 N.Y. 489 (1873) (lien can be used to recover for all services). For New York cases following the proposition that a retaining lien attaches to all property, see Lovell's Ebb Tide Room v. Aetna Casualty & Sur. Co., 56 Misc. 2d 170, 288 N.Y.S. 2d 425 (Sup. Ct. 1968); Entertainment & Amusements of Ohio v. Barnes, 49 Misc. 2d 316, 267 N.Y.S. 2d 359 (Sup. Ct. 1966). See also JoNEs, supra note 5, at See People ex rel. Goldberg v. Gordon, 199 Colo. 296, 607 P.2d 995 (1980). In Goldberg, there was no basis for a lien on the client's stock certificates in the attorney's possession because, at the time of assertion, the attorney was not owed a "general balance of compensation." Id. at 300, 607 P.2d at 997. The court adopted the conclusion of the Colorado Grievance Committee that where the client had repeatedly asked for her files and stock certificates and had advised the attorney that he would be paid when the estate was completed, the attorney "either had no right to a lien or lost such a right by abusing the privilege afforded him [under the statute]." Id. 44. See SPEISER, supra note 5, at 16:6 (retaining lien applies to a general balance for all professional services). See also Weed, 56 Vt. at 580, where the court discussed the historical background of the allowance for fees and costs. 45. For judicial application of this legal premise, see, e.g., Jarboe v. Hicks, 281 Ark. 21, 660 S.W.2d 930 (1983) (attorney does not have lien on settlement recovered by another attorney and is entitled only to a reasonable fee or compensation); In re Applica-
10 BRIDGEPORT LAW REVIEW [Vol. 6:77 come into their possession within their professional capacity.", Thus, for example, no lien rights come into existence if the lawyer is acting as a trustee," ' or if he or she holds the papers for a special purpose." e Similarly, the retaining lien does not extend to records and papers which, by the rules of a court, have to be filed in court, 9 or to documents received in connection with transactions that do not concern strictly legal services Loss of the Lien With a retaining lien, the attorney may retain possession until the client pays, or, in some instances, until security is given by the client. 51 An attorney loses the lien when the property in tion of Kitzen, 25 N.Y.S.2d 738 (Sup. Ct. 1940) (lien to attorney of record only). 46. Weed, 56 Vt. at 578 (attorney has lien on client's papers which he obtained in his capacity as advocate without the necessity of any special contract regarding them). 47. See Akers v. Akers, 233 Minn. 133, 46 N.W.2d 87 (1951) (no lien as trustee). 48. See Gitlitz, 499 F. Supp. at 1015 (no retaining lien on funds deposited with an attorney in escrow for payments to others absent specific authorization in the escrow agreement to pay the attorney out of the escrow fund); Entertainment & Amusements, 49 Misc. 2d at , 267 N.Y.S.2d at (no retaining lien on escrow funds). See also City of New York v. Avenue U Serv. Center, 5 Misc. 2d 795, 141 N.Y.S.2d 584 (Sup. Ct. 1955) (attorney has no lien on money deposited with him in escrow for the payment of creditors). 49. Severdia v. Alaimo, 41 Cal. App. 3d 881, 116 Cal. Rptr. 405 (1974) (filing pursuant to court order had effect of invalidating the attorney's lien); In re Bergstrom, 131 A.D. 791, 116 N.Y.S. 245 (App. Div. 1909) (attorney lost a lien on papers by filing them with the court pursuant to a court order). 50. See Nancy Lee Mines v. Harrison, 93 Idaho 652, 655, 471 P.2d 39, 42 (1970). In Nancy Lee Mines, an attorney acted both in a managerial capacity and as legal counsel to a corporation. The attorney did not acquire a retaining lien on the records and books of the corporation to secure payment for his managerial services. Id. at , 471 P.2d at Therefore, the attorney's lien was found to be invalid where it was used to recover compensation for managerial services unrelated to the legal services also performed by him. Id. at 655, 471 P.2d at 42. See also Jovan v. Starr, 87 Ill. App. 2d 350, 231 N.E.2d 637 (1967) (attorney holding earnest money deposit as escrow had no lien on the money since no attorney-client relationship existed); Anataya v. Majett, 12 Misc. 585, 177 N.Y.S.2d 242 (Sup. Ct. 1958) (no lien for non-legal services); Note, Attorney's Liens, supra note 5, at But see Brauer v. Hotel Assoc., 40 N.J. at -, 192 A.2d at 834 (allowing the attorney's lien on corporate records which had come into the possession of an attorney in his capacity as an attorney and not as an agent of the corporation). 51. For the proposition that the courts may order the client to pay reasonable attorney's fees or post a bond as security before requiring relinquishment by the attorney, see generally Iowa v. Union Asphalt & Road Oils, Inc., 409 F.2d 1239 (8th Cir. 1969) (attorney withdrawal conditioned upon payment of fees); National Equip. Rental v. Mercury Typesetting Co., 323 F.2d 784 (2d Cir. 1963) (where the fee dispute concerned matters unrelated to the pending litigation, the court could not condition substitution on posting of security).
11 1985] ATTORNEY'S LIENS possession is lost. 2 If an attorney voluntarily gives up possession of the papers, the lien is terminated. 53 Another way that the lien A number of jurisdictions have approved court orders to relinquish the property upon condition that the client pay the asserted claim or furnish security. See Upgrade Corp. v. Michigan Carton Co., 87 Ill. App. 3d 662, 410 N.E.2d 159 (1980); Morse, 65 Nev. at , 195 P.2d at 199; Steiner v. Stein, 141 N.J. 478, 58 A.2d 102 (1948). See also The Flush, 227 F.2d at 28. The court found that where substitution of the attorney is based on misconduct, the attorney must give up his papers without payment of fees and bring a separate action. Where there is no charge of misconduct, the general rule is that the request for substitution will not be granted unless there is some provision "that the fees and expenses of the displaced attorney shall be paid or secured to him, or his lien in some way preserved." Id. For a case which outlines several factors to be considered in determining what security should be required for release of files when the attorney/client relationship has terminated, see Miller, 615 P.2d at 617. These factors are: (a) Whether there was just cause for discharging the attorney; (b) Whether the attorney initiated the withdrawal; (c) The client's ability to provide security or to pay the fee; (d) The importance of the files to the client; (e) The ethical obligations of an attorney; (f) Whether the fee is disputed, and, if so, the reasonable amount of any lien to be charged; (g) Whether the amount due the attorney is contingent or fixed; (h) Whether part of the sum due is for costs advanced by the attorney which may justify reimbursement before ordering release of the files. Id. at 620 (footnote omitted). 52. See Weed, 56 Vt. at 578, 48 Am. Rep. at 821. "Having the possession, he has the right to retain them against his client... until the general balance due him for his legal services is paid. The client cannot discharge him and withdraw such papers or money from his hands without first paying the general balance due him for legal services... " Id. See also Hauptmann v. Fawcett, 243 A.D. 613, 276 N.Y.S. 523, modified, 243 A.D. 616, 277 N.Y.S. 631 (1935) (where the papers were essential to defense of a criminal charge, attorney was required to give up possession and lost his lien). 53. See Reynolds v. Warner, 128 Neb. 304, 258 N.W. 462 (1935). In Reynolds, the possessory lien was lost when the attorney filed papers in his possession in court in order to procure a judgment. The court said that the attorney "has his choice of action at the time, either to retain the papers and his lien or to give up the papers and surrender his lien." Id. at -, 258 N.W. at 464. See also American Fidelity Fire Ins. Co. v. Paste-Ups Unlimited, 368 F. Supp. 219 (1974) (in a garnishment proceeding, failure to adhere strictly to statutory procedures will result in the loss of the garnishment lien); Mahomet v. Hartford Ins. Co., 3 Wash. App. 560, 477 P.2d 191 (1970) (surrender by the attorney of the client's fire insurance policies had the effect of invalidating the attorney's statutory retaining lien in the absence of an agreement or an assignment); Hazeltine, 5 W. Va. at 605, 46 S.E. at (voluntary surrender of notes released any possible lien); Gillespie v. Hynes 168 Neb. 49, 95 N.W.2d 457 (1959). The court in Gillespie, finding that the claimant had no right to a mechanic's lien in view of the failure to comply with statutory requirements, cited Reynolds, 128 Neb. at 304, 258 N.W. at 462 for the proposition that an equity court was without jurisdiction to enter personal judgment against the defendant where no lien existed. Id. at 89-90, 95 N.W.2d at 458. But see American Nat'l Bank v. Funk, 68 Okl. 169, 172 P (1918) (deposit of check with a bank clerk was not such
12 BRIDGEPORT LAW REVIEW [Vol. 6:77 can be lost is when an attorney, bringing an action to collect fees, files with the court the papers upon which the lien is asserted. 5 " However, bringing an action by itself does not ordinarily release the lien. Forfeiture of the lien results as well from any agreement, express or implied, between the attorney and client. 5 5 It is also forfeited by withdrawal from a suit by an attorney without just cause 56 or reasonable notice, 51 that is, by voluntary withdrawal without justification. However, if an attorney is wrongfully discharged by the client, the attorney has a retaining a release of possession as to destroy attorney's lien). 54. Jenkins, - Colo. at -, 676 P.2d at The Jenkins court limited application of the general rule that a lawyer's retaining lien should be protected until fees are paid to proceedings other than a suit by the attorney to recover fees. The court held that an attorney forfeits his rights to exclusive possession in a suit for fees in view of policies favoring discovery and the availability of judgment creditor's remedies to the attorney. Id. In Ross, 6 Ill. App. 2d 304, 127 N.E.2d 519, a former client who was being sued for fees obtained a subpeona duces tecum for her papers. The attorney refused to comply, arguing that an attorney should not be compelled to produce records on which he has a retaining lien until he has been paid. The court ruled for the client, reasoning that it was the duty of the attorney to make complete disclosure. For a discussion of loss of an attorney's lien, see Note, Attorney's Retaining Lien, supra note 5, at See Gonzalez v. Sword Line, Inc., 201 F.2d 416 (2d Cir. 1953) (where the attorney and the client had specifically provided by agreement that the attorney would look to client's insurers for compensation, there was no lien). See also 2 F. R. MECHEM, AGENCY 2273 (2d ed. 1914) (if an attorney takes independent security for payment of fees, a court may find acquiescence to an implied agreement). 56. For a discussion of the issue of just cause in several jurisdictions, see, e.g., Borup, 150 F. Supp. at 810 (dictum) (mere fact that client refused to accept settlement does not constitute just cause for withdrawal); Burston v. Pinkis, 25 N.Y.S.2d 12 (Sup. Ct. 1941) (attorneys who withdrew without justifiable cause were not entitled to recovery on contract or quantum meruit or oral promise of client); Howard v. McCarson, 215 Ala. 251, 110 So. 296 (1926) (when an attorney accepts a retainer, he enters a contract to proceed to conclusion, and he may not abandon his relation without justifiable cause or the client's consent (citing 6 CoRP. Jus. 186 (1924))); Genrow v. Flynn, 166 Mich. 564, 131 N.W (1911) (where the client charged the attorney with falsehood, gross fraud and negligence by telegram rather than by mail, the attorney had proper grounds for abandonment). 57. Tenney v. Berger, 93 N.Y. 524 (1883) (dictum) (an attorney who abandons the service of his client without justifiable cause and reasonable notice cannot recover for the services rendered). See also Demov, Morris, Levin & Shein v. Glantz, 53 N.Y.2d 553, 428 N.E.2d 387, 444 N.Y.S.2d 55 (1981) (a client may discharge an attorney at any time, with or without cause (citing Tenney, 93 N.Y. at 529)). The New York courts have held that even a mere threat of withdrawal works a forfeiture of the possessory lien. See Kaplan v. Kaplan, 65 N.Y.S.2d 677, 678 (Sup. Ct. 1946). While an attorney who withdraws from a case for justifiable reason or is wrongfully discharged may have the right to a retaining lien, courts have recognized exceptions to the general right. See Hernandez v. Nierenberg, 15 Misc.2d 818, 179 N.Y.S.2d 322 (Sup. Ct. 1958) (where the client was unable to pay or post bond).
13 1985] ATTORNEY'S LIENS lien on papers and files in the case." 4. Assignment and Set-off of Lien As a general rule, the common law retaining lien cannot be assigned. 59 Courts have expanded the general rule and have refused assignment in light of ethical considerations, as, for example, where an assignment would violate the attorney's duty to maintain the confidences of the client inviolate. 60 Courts have also restricted assignment on the basis that the attorney has a fiduciary relationship with the client. 6 " Unlike other creditors, the attorney is viewed as more than a mere bailee since the client's property comes into the hands of the attorney in personal trust. 62 Concerning other creditors, the attorney's lien may be protected against the set-off rights of other parties Courts' Power to Enforce Retaining Lien The courts' inherent power to enforce retaining liens arises out of its ability to control and to protect its officers. " ' Recognizing the dual nature of this power the Second Circuit has held 58. See Midvale, 21 Utah 2d at 182, 442 P.2d at 940. In Midvale, the court stated in a dictum that "[i]f the attorney is wrongfully discharged by the client, he need not surrender his papers in the case until he is paid his fee for services rendered." Id. But see National Sales, 136 Ariz. at -, 667 P.2d at 741, discussed at supra notes 2-3. The concurrence disagreed with the conclusion reached in Midvale. Citing Midvale as a case where the court discussed a misuse of the lien, it stated that a lien should not be used to force a client to settle a dispute obligation in order to obtain documents urgently needed. National Sales at -, 667 P.2d at 741. See also Miller, 615 P.2d at 621 (Matthews, J., dissenting). The Miller dissent recognized that a client has an absolute right to discharge his attorney with or without cause without undergoing financial penalties. The Miller dissent relied on Fracasse v. Brent, 6 Cal. 3d 784, 494 P.2d 9 (1972) and Heinzman v. Fine, 216 Va. 958, 234 S.E.2d 282 (1977). 59. Cf. SPEISER, supra note 5, at 16:12-16:13. But see Davis v. National Sur. Co., 139 Cal. 223, 72 P (1903) (where assignment of a retaining lien was allowed). 60. See THORNTON, supra note 5, at See, e.g., Sullivan v. Mayor of New York, 68 N.Y. 544 (1893). 62. Leask v. Hoagland, 64 Misc. 156, 188 N.Y.S (1909), rev'd on other grounds, 136 A.D. 658, 121 N.Y.S. 197 (1910). 63. For cases in New York and New Jersey holding that a trustee in bankruptcy takes title subject to all the liens on the property, including the attorney's retaining lien for services rendered prior to the bankruptcy, see In re San Juan Gold, Inc., 96 F.2d at 60; In re Allied Owners' Corp., 72 F.2d 255 (2d Cir. 1934); In re Eurich's Ft. Hamilton Brewery, 158 F. 664 (E.D.N.Y. 1908); In re Wilson, 12 F. 235 (S.D.N.Y. 1882). 64. Leviten v. Sandbank, 291 N.Y. 352, 52 N.E.2d 898 (1943) (retaining liens were created by the courts for the protection of its officers).
14 BRIDGEPORT LAW REVIEW [Vol. 6:77 that "the power which the courts have summarily to enforce performance by the attorney of his duties toward his client enables the court to protect the rights of the attorney as against the client." 6 The power to enforce is not only inherent, it is discretionary." For example, the courts can lift the lien, as did the New York Court of Appeals when the client rendered security in lieu of the papers in a fee dispute situation. The New York court held that insisting on a lien in such circumstances was not in accordance with the standard of conduct a court can require. In sum, courts can enforce and restrain the attorney's right to a lien. C. The Special or Charging Lien 1. Nature of the Lien The charging lien is a claim by the attorney on the judgment, decree or award for fees and costs in a particular case. 68 An attorney who has not been paid can "lien" on the judgment recovered in order to recover the monies owed by the client in a particular action. Where there is no recovery in the litigation, 65. Everett, 225 F. at 935. The Everett court held that a client had a right to change the attorney at any stage of the proceeding without assigning any reason. However, in ordering the substitution, the court might impose such terms as might be justified under the circumstances to protect the rights of the attorney if he were free from fault. Id. 66. See In re Long, 287 N.Y. 449, 40 N.E.2d 247 (1942) (when a court exercises its inherent power in the absence of statutory rules, procedure rests largely in the discretion of the court). 67. Id. See In re Grand Jury Proceedings, 727 F.2d 941, (10th Cir. 1984). The court found that only the client had an ownership right in the attorney's file, and that the attorney's interest was only that of a retaining lien. "[H]is interest at best is a pecuniary one, not an interest of ownership, nor privacy." Id. at 945. Consequently, the court held that it may order the files surrendered to the client or another attorney on the request of the client, subject only to the attorney's right to be protected in receiving compensation from the client. Id. at See In re Heinsheimer v. Schulte, 214 N.Y. 361, 108 N.E. 636 (1915). Judge Cardozo wrote: It was not a lien for a general balance of account. It was a lien for the value of the services rendered in that very action....if the attorney got possession of the fund, he had a general lien. If he did not get possession his lien was for the services that brought the fund into existence. Id. at 362, 108 N.E. at 637. See generally Note, General or Retaining Lien, supra note 5, at 821.
15 1985] ATTORNEY'S LIENS the lien does not attach. 9 Created as an equitable lien, the purpose was to protect the rights of an attorney without possession of the client's property. 70 The lien is sometimes viewed not as a lien at all, but as "merely a claim to the equitable interference of the court to have the judgment... held as security for the debt." '7 ' The reason for viewing it as a "non-lien" is that it lacks the essential possessory element characteristic of most liens. 72 Because it does not depend on possession, the charging lien is unlike most other liens known to the law. 7s It resembles and is most closely allied 69. Dempsey v. Pink, 101 F.2d 72 (2d Cir. 1939), cert. denied, 307 U.S. 639 (1939) (where there is no recovery, proof of an agreement to pay the attorney out of a particular fund is needed for the creation of a lien). 70. Robinson v. Rogers, 237 N.Y. 467, 143 N.E. 647 (1924) (courts may not destroy charging lien on proceeds of judgment or settlement, although they can compel a discharged attorney to deliver client's papers or property before payment of his fee if bond or other security is received). One court construed the purpose of the lien as one of protecting attorneys against "the knavery" of their clients. See Goodrich v. McDonald, 112 N.Y. 157, 163, 19 N.E. 649, 651 (1889). See also In re Albrecht, 132 Misc. 713, 230 N.Y.S. 543 (Sup. Ct. 1928), afl'd, 225 A.D. 423, 233 N.Y.S. 383 (1929), afl'd, 253 N.Y. 537, 171 N.E. 772 (1930) (since there was no verdict, award or judgment to which lien could attach, attorney was not entitled to lien); Ashman v. Shecter, 196 Md. 168, 76 A.2d 139 (1950). The Ashman court noted that the charging lien was not patterned after doctrines formulated in other cases but was based on the broad principles of justice that an attorney should be paid out of the judgment obtained as a result of his skills and labor. Id. at 174, 76 A.2d at 142. "It was a means invented by the courts to protect attorneys from being cheated by their clients by preventing clients from receiving the fruits of recoveries without paying for the valuable services by which the recoveries were obtained." Id. See also Stone, Mechanic's Liens, 30 DRAKE L. REV. 39, 42 ( ); United States v Acres of Land, 167 F. Supp. 512 (D. Md. 1958). Relying on the principle announced in Ashman, the Maryland district court found that attorneys for owners of land condemned by the United States were not entitled to a lien on the fund paid into court by the United States. Id. at 516. The attorneys had an adequate remedy at law to recover compensation since the client was solvent and able to respond to any judgment against him. Id. Cf. United States v. Jacobs, 187 F. Supp. 630 (D. Md. 1960) (the court allowed the attorney's lien on a fund held for client on equitable principles). 71. United States v. Hudson, 39 F. Supp. 797, 801 (D. Md. 1941). See Note, Attorney's Liens, supra note 5, at 542. See also Randall v. Van Wagenen, 115 N.Y. 527, 22 N.E. 361 (1889) ("By the common law, an attorney, by commencing a suit, acquires no lien on the cause of action. The lien only arises after the judgment, and is a right to have the judgment held for the debt...." Id. at 531, 22 N.E. at 362 (emphasis added)). 72. In this respect, the charging lien resembles the mechanic's lien, in that one who has produced the product, while not retaining possession, is entitled to the fruit of his or her labor. For a more complete discussion of the mechanic's lien, see infra note For a discussion of this distinguishing feature, see In re Heinsheimer, 214 N.Y. at 361, 108 N.E. at 636. Justice Cardozo wrote: "This lien was not dependent on possession. The very reason for its existence was to save the attorney's rights where he had
16 BRIDGEPORT LAW REVIEW [Vol. 6:77 with a mechanic's lien. A mechanic's lien does not depend on possession and, like the charging lien, is based on the concept of reaping the fruit of one's labor. 74 Despite these views, this right of an attorney to reap the benefits of his or her labor has been continuously recognized and labeled by the courts as a charging lien. 7 s 2. Scope of the lien A charging lien permits an attorney with standing to intervene in an action in the lawyer's own name. 7 6 Thus, no separate action need be initiated such as a separate suit for fees." A been unable to get possession." Id. at , 108 N.E. at 637. See also SPEISER, supra note 5, at 16:41; Wentworth, supra note 5, at 195; Note, Attorney's Liens, supra note 5, at The theory and purpose of a mechanic's lien is to protect persons who have supplied labor and material for the construction, improvement, or repair of a building or other structure by giving the lien holders security independent of their contractual remedies against the owner of the property. See S. PHILLIPS, THE LAW OF MECHANIC'S LIENS 9 (3d ed. 1893). Like the attorney's charging lien, the focus is on services rendered rather than on possession. The mechanic's lien is designed to prevent the recipient of services from retaining the benefit of such services without paying, as is true also of the attorney's charging lien. Both types of liens can be viewed as essentially remedial interests rather than ownership interests in property. Mechanic's Hens can be distinguished from the attorney's charging lien in at least two regards. First, the mechanic's lien is a statutory lien and is not recognized in equity, as the charging lien is, without statutory authorization. Id. at 15. Second, the holder of a mechanic's lien has a right to force a judicial sale of the property, but an attorney cannot do the same with a court judgment. Id. However, the enforcement of mechanic's liens can be subject to equitable principles. See Stone, supra note 70, at 42. For example, the Iowa Supreme Court has mandated that the mechanic's lien statute be interpreted to effect its equitable purposes. In Gollehon, Schemmer & Assoc. v. Fairway-Betterdorf Assoc., 268 N.W.2d 200 (Iowa 1978), the court held that the attorney's lien statute is to be "liberally construed with a view to promoting its objects and to assisting the parties in obtaining justice." Id. at For a discussion of the nature and historical background of the charging lien, see supra notes & For a recent case supporting the proposition that an attorney is entitled to reap the benefits of his or her labor, see In re Ernst, Inc., 4 Bankr. 317, (Bankr. S.D.N.Y. 1980) (attorney retained on a contingent fee has a lien in the amount of his fee against any fund generated due to his efforts). See generally Thompson, Attorney's Fees and Liens, 85 CoM. L.J. 136, (1980). 76. Standidge v. Chicago Ry. Co., 254 Ill. 524, 98 N.E. 963 (1912) (attorney need not bring separate suit to recover fees). 77. See Gee v. Crabtree, 192 Colo. 550, 560 P.2d 835 (1977). In reviewing the Colorado statute on attorney's liens, COLo. REV. STAT (1973), the Gee court allowed the statutory charging lien without an independent civil action on the basis that restricting enforcement to an independent action would be a waste of judicial time and contrary to legislative intent. Id. at 552, 550 P.2d at 836. See also Frazee, 104 Idaho at P.2d at 929. In dicta, the Frazee court, citing Skelton v. Spencer, 102 Idaho 69,
17 19851 ATTORNEY'S LIENS charging lien allows the attorney to be paid from the money judgment recovered 7 8 and to be paid before other creditors. 79 No charging lien arises if the attorney's work does not produce an 625 P.2d 1072, cert. denied, 454 U.S. 894 (1981), held that an attorney was not required to file an independent action but could file his claim in connection with the divorce proceedings. But see Hawkins v. Powers, 635 P.2d 915 (1981) (dispute over attorney's fees arose after the completion of the primary litigation). 78. See In re Shirley Duke Assoc., 611 F.2d 15 (2d Cir. 1979). An attorney has a lien upon the fund created by his litigation efforts and nothing more. As a result, the Duke court held that the attorney representing a creditor in a bankruptcy proceeding was limited, by way of lien, to the fund allocated to the payment of his client's claim. He could not ask the court to enforce a lien upon a separate fund. Id. at 18. See also Regan v. Marco M. Frisone, Inc., 54 A.D.2d 1125, 388 N.Y.S.2d 798 (1976). The general rule is that the lien attaches only to a money judgment. In Connecticut, like most states, there can be no lien on specific real or personal property. See Hagearty, 4 Conn. Supp. at 505 (attorney who prosecutes an action involving the title to real estate does not, in the absence of a special agreement or statute, acquire a right of lien upon the disputed real estate. See also Wessinger v. Sturkie, 77 F.2d 751 (4th Cir. 1935) (attorney is not entitled to liens on property involved in litigation for fees). But see Ashman, 168 Md. 168, 76 A.2d 139 (1950). The almost universal belief is that the common law grants no lien on property to an attorney hired to secure title to real property. In Ashman, the attorney did not even acquire the property as the result of a suit, so that no charging lien on the property was allowed. However, in Ashman, a statute allowing a charging lien on property superseded the efficacy of the common law lien. See, e.g., Fillmore v. Wells, 10 Colo. 228, 15 P. 343 (1887) (recognizing that the Colorado statute on attorney's liens was more comprehensive than the common law lien, the court held that the language of the statute allowing an attorney a lien on "any judgment," regardless of subject matter, showed legislative intent to allow a lien upon real property); Lovett v. Moore, 98 Ga. 158, 26 S.E. 498 (1895) (attorney given statutory lien on land for his services in successfully defending an adverse claim to the land). See also In re King, 168 N.Y. 53, 60 N.E (1901) (New York statute allowed an attorney to have a charging lien on personal property recovered by him for his client). But see Ekelman v. Marano, 251 N.Y. 173, 167 N.E. 211 (1901) (an attorney has no lien on property for successfully defending title thereto). An agreement between the attorney and client will also effectuate a lien on property. See, e.g., Mackall v. Willoughby, 167 U.S. 681 (1897) (because there was an agreement between the attorney and the client, the attorney was given a lien on the property, title to which he successfully defended against a claim by third persons). See also Webster v. Sweat, 65 F.2d 109 (5th Cir. 1933) (the federal court, in applying Mississippi Law, held that where land is taken in satisfaction of a judgment, the lien does attach to the land). 79. United States v. Thornhill, 703 F.2d 1288 (9th Cir. 1983). A client may by agreement grant a lien to the attorney which would take precedence over other creditors. Id. at 1300 (citing, inter alia, Isrin v. Superior Court, 403 P.2d 728, 45 Cal. Rptr. 320 (1965)). In Thornhill, the equitable liens for attorney's fees could not prevail against the government's income tax lien since there was no written fee agreement. Thornhill, 703 F.2d at See also United States v. Jacobs, 187 F. Supp. 630 (D. Md. 1960) (lien of discharged attorney was held superior to both the state and federal claims for a lien against the same sum). For an older case cited frequently for this proposition, see Weed, 56 Vt. at 581 (attorney's lien prevailed over an attachment by trustees because trustees knew that the attorneys were prosecuting the action against them and thus the law presumed that the trustees had knowledge and notice).
18 BRIDGEPORT LAW REVIEW [Vol. 6:77 identifiable fund. 80 As is true with the retaining lien, the lawyer can obtain compensation for both fees and costs. 8 Courts differ as to whether the basis of recovery is on the contract or in quantum meruit. 82 There are clear distinctions between a retaining lien and a charging lien. Unlike the passive retaining lien, the charging lien depends on an affirmative act by the attorney. 8 " The charging lien also pertains only to the particular judgment in question and not to a general balance due. A lawyer cannot use a charging lien to recover for past services nor to recover if a second attorney litigates to judgment. 8 Failure to make these distinctions 80. See, e.g., Cox v. Scott, 10 A.D.2d 32, 197 N.Y.S.2d 60 (1960) (no charging lien for attorney's search for funds left by client's wife); Desmond v. Socha, 38 A.D.2d 22, 327 N.Y.S.2d 178 (1971), afl'd, 31 N.Y.2d 687, 289 N.E.2d 181, 337 N.Y.S.2d 261 (1972) (no charging lien where attorney only defended an interest and his services neither created a fund nor proceeds out of which he sought payment); Spinello v. Spinello, 70 Misc. 2d 521, 334 N.Y.S.2d 70, 76 (Sup. Ct. 1972) (no charging lien since no fund created); Ekelman, 251 N.Y. at 173, 167 N.E. at 211 (no charging lien where attorney only defended a title or interest already held by the client). 81. High Point Casket Co. v. Wheeler, 182 N.C. 459, 109 S.E. 378 (1918). The attorneys were awarded one-third of the amount of judgment and costs, and were entitled to the value of their contract less the quantum meruit of the defendant. 82. See Potts v. Mitchell, 410 F. Supp (D. N.C. 1976) (attorneys were not entitled to recover the full value of their contract and were allowed only quantum meruit since they had not prosecuted the case to judgment); State v. Radinsky, 182 Colo. 250, 512 P.2d 627 (1973) (recovery on quantum meruit). Cf. High Point, 182 N.C. at 459, 109 S.E. at 378 (recovery allowed on contract). 83. See Frazee, 10 Idaho at 464, 660 P.2d at 931. "In sum, an attorney's charging lien is not passive as is the possessory or retaining lien. A charging lien is only brought about by some affirmative act of the party asserting the lien in reducing it to a judgment or order of the court." Id. The court found that no fund existed since the divorced husband had already paid the client-wife. See also Hubbard v. Ellithorpe, 135 Iowa 259, 112 N.W. 796 (1907) (in a suit for services for obtaining a divorce for the wife, the court allowed the attorney a lien on the funds paid to the court by husband to satisfy judgment against him); Campanello v. Mason, 231 Okla. 159, 571 P.2d 449 (1977) (where the client received title in a divorce settlement, the attorney was entitled to charging lien because no new rights or "fruits" were created); Ross v. Scannell, 97 Wash. 2d 598, 647 P.2d 1004 (1982) (the special or charging lien has the capacity to be adjudicated and enforced). But see Sooner Fed. Say. & Loan Ass'n. v. Mobley, 645 P.2d 1000 (Okla. 1982). No statutory attorney's lien was placed upon the homestead awarded to the husband in the divorce decree. Therefore, the divorce judgments requiring the husband to pay attorney's fees to his former wife's attorney were money judgments not enforceable against the husband's homestead). Id. at See, e.g., Jarboe v. Hicks, 281 Ark. 21, 660 S.W.2d 930 (1983) (interpreting the Arkansas statute on attorney's liens). The court found that the discharged attorney was entitled only to a reasonable fee as compensation.
19 1985] ATTORNEY'S LIENS has led to conflict and confusion in many cases Contract Considerations Even though a special or charging lien is allowed on the theory that the service or skill of the attorney produced the judgment, assertion of the lien depends on the existence of a valid contract for fees, either express or implied. 6 Without a valid contract, no lien can be asserted. 8 7 The attorney and client can also agree by contract that there will be a lien on the cause of action, as well as on the judgment. 88 In such a case, a settlement before judgment will not destroy the lien. Absent a contractual agreement, however, a settlement before judgment will render the lien invalid. 89 A contract providing an attorney with a fixed percentage of the recovery does not alone give rise to such a lien. 90 Where the amount of compensation is agreed upon, the attorney has a lien in that amount. 91 Where the attorney has 85. In the leading Nevada case of Morse, 65 Nev. at 275, 195 P.2d at 199, the court found that the attorney had two liens: a statutory charging lien and a common law retaining lien. For other courts which distinguished the two kinds of liens, see Adams, 597 F.2d at 570, discussed at infra note 203 and accompanying text; Weed, 56 Vt. at See, e.g., Johnson v. Blue Cross, 329 N.W.2d 49 (Minn. 1983). The court found no implied-in-fact or implied in-law contract between the attorney and Blue Cross and, consequently, did not allow a charging lien on the reimbursement to the health carrier for a worker's compensation claim successfully settled by the attorney. Id. at 52. But see Kleager v. Schaneman, 212 Neb. 333, 322 N.W.2d 659 (1982). In Kleager, a divorced wife seeking an accounting against her ex-husband executed a fee contract with her attorney in which she agreed to pay the attorney one-third of all money recovered. Even though the wife filed a written dismissal of the accounting action after payment to her by the exhusband, the court allowed the attorney to assert the lien based upon the contract. Id. 87. See Hightower v. Detroit Edison Co., 262 Mich. 1, 247 N.W. 97 (1933) (because the compensation claimed by an attorney was under an illegal retainer agreement, the court refused the attorney a lien in his own right on the judgment). 88. BROWN, THE LAW OF PERSONAL PROPERTY 116 (1936). 89. See Randall v. Van Wagenen, 115 N.Y. 527, 22 N.E. 361 (1889). Even where there may have been collusion between the parties to settle before judgment, the attorney had no lien on the judgment and was required to bring a separate suit. Id. at 530, 22 N.E. at Button v. Anderson, 112 Vt. 531, 536, 28 A.2d 404, 407 (1942). The test of whether an equitable lien on a recovered fund arises is whether the party contracting for the services sufficiently indicates an intention to make the fund described in the contract security for the debt. It does not arise solely on the basis of a contract for a contingent fee. Id. 91. See Blazek v. North American Life & Casualty Co., 265 Minn. 236, 121 N.W.2d 339 (1963) (a contract in which the client agreed to pay one-third of all proceeds collected from an insurance company established the attorney's right, not only to one-third of the judgment recovery but also to all future payments under the insurance policy).
20 BRIDGEPORT LAW REVIEW [Vol. 6:77 been discharged or where no specific agreement exists, the attorney is entitled to reasonable compensation and a lien to that extent. 92 A. Overview III. LIENS IN CONNECTICUT The law in Connecticut regarding attorney's liens is unclear because the case law is sparse and there are no statutory provisions on point. An early decision acknowledged the charging lien but questioned the existence of the retaining lien. 93 A later holding suggests that the only lien existing in Connecticut is a retaining lien." However, the CBA recently has advanced the opinion that no retaining lien exists in the state. 5 The existence of the retaining lien is therefore questionable. It seems clear 92. See Potts v. Mitchell, 410 F. Supp (W.D.N.C. 1976), holding that, where the attorney's firm was discharged, the only recovery was for the reasonable value of the services and not for the full value of the contingent fee contract. Id. at The Potts court distinguished its result from the holding of High Point, 182 N.C. at 459, 109 S.E. at 378. High Point held that where the attorney had fully performed, the contract constituted an equitable assignment of the judgment which vested when the case was settled or prosecuted to judgment. Id. The general rule is that there can be no vesting if the attorney has not fully performed. Potts, 410 F. Supp. at See also Cole v. Myers, 128 Conn. 223, 21 A.2d 396 (1941), in which the court affirmed the client's right to discharge the attorney with or without cause. The Cole court held that the client's right to discharge "would be a barren power if the contract fee... [was] nevertheless to be paid." Id. at 230, 21 A.2d at 399. As a corollary, the Cole court held that the attorney was not entitled to receive "the agreed fee he probably would have earned had he been allowed to continue in his employment." Id. Thus the attorney was entitled only to a reasonable compensation. See generally Nutt v. Knut, 200 U.S. 12 (1906) (contract giving lien on the amount allowed was void under a federal statute, but the provision agreeing to pay the compensation fixed was not in violation of the statute and could stand alone); Myers v. Miller, 134 Neb. 824, 279 N.W. 778 (1939) (the court can protect, through equity, the claim of the attorney and can secure payment of just charges earned from the fruits of his or her own labor). 93. See Andrews, 12 Conn. at 446, where the court stated: We do not say, nor do we believe, that attorneys in any case have a lien upon the judgments and papers of their clients similar to that which manufacturers and others have upon goods and moneys in their hands. We only say, that they have, in certain cases of which this is one, such a claim upon them as courts of law and equity will protect and enforce, until their lawful fees and disbursement are paid, subject to the equitable rights of others. Id. (emphasis added). 94. See Hagearty, 4 Conn. Supp. at See generally CBA Comm. on Professional Ethics and Grievances, Formal Op. 31 (1978) [hereinafter cited as CBA Formal Op. 31].