Tuesday, July 2, 2002
Attorney’s Lien Laws Need Revising, First District Presiding Justice Says
By ROBERT GREENE, Staff Writer
A quirk in the law of attorney’s liens that allows some lawyers to tie up an ex-client’s award by filing a false lien should be fixed, the First District Court of Appeal said yesterday—-but by the Legislature, not by the courts.
Presiding Justice Barbara J.R. Jones of Div. Five asked that lawmakers grant trial courts “the authority to strike or expunge the notice of lien when the attorney fails to make a prima facie showing that he has a valid lien on the judgment.”
An attorney’s lien in California is created by an express provision or by implication in a fee contract that the lawyer is to be paid his or her fees from the proceeds of the judgment. A direct contractual relationship between lawyer and client is required.
The lien blocks distribution of the award to the clients until they and the lawyers determine who gets what. The question becomes complicated when more than one lawyer claims the right to a portion of the same client’s winnings.
The call for procedural safeguards for clients came in a ruling on a fee dispute between the well-known Alioto law firm in San Francisco and a lawyer the firm hired to help handle a race-based employment discrimination case.
Waukeen Q. McCoy ended up walking away with three of the 23 plaintiffs in the case, then filed notice of an attorney’s lien on the awards of 11 of the clients who remained with the Law Offices of Joseph Alioto and Angela Alioto for the value of the work he performed while he was still there.
The dispute turned into several lawsuits, including one by McCoy against the firm to recover his “earnings,” one by the firm against McCoy for taking the three clients, and one by McCoy against the firm for malicious prosecution.
In the underlying employment case, the San Francisco Superior Court judge granted the Alioto firm’s motion to “expunge” McCoy’s lien on the 11 clients. But Jones said the judge had no jurisdiction to determine whether that lien was valid. A lien could be implied only if there was a contract between McCoy and the 11 clients, she said, but only a judge in a new suit brought expressly to assess the lien could make those factual findings.
The attorney is not a party to the underlying case and has no right to intervene, Jones said, explaining that the trial court in such a case acts in excess of its jurisdiction when ruling on a lawyer’s request to foreclose on a lien on the judgment.
The judge could rule on neither McCoy’s lien, nor the law firm’s attempt to have it extinguished, or “expunged.”
“At most, McCoy demonstrated that he performed services in the case and that he may be entitled to recover the reasonable value of his services,” Jones said. “He produced nothing to show that he was entitled to look to the plaintiffs’ judgment for payment of his legal services. Under the current state of the law, however, in the absence of any legislative directive, we are compelled to conclude that the trial court had no authority to assess the validity of the lien and, consequently, no power to extinguish the lien or to expunge the notice of the lien.”
Attorney’s lien cases can be complex and confusing, in part because such liens resemble service or mechanic’s liens, but are created and to some extent operate differently.
Further adding to the confusion is the practice of some lawyers to serve notices of attorney’s liens, which Jones branded as “superfluous,” that the underlying trial courts have jurisdiction to accept—-even though they have no jurisdiction to determine their validity. To make matters worse, other types of notices of lien establish priorities, but with attorney’s liens, only the contract creates the lien and establishes priority.
It is unnecessary for a lawyer filing a notice of attorney’s lien to make a showing in the underlying action that the lien is probably valid.
“Consequently,” Jones said, “an attorney’s lien impairs the ability of a successful plaintiff to obtain the full proceeds of the judgment even though the attorney may not have actually performed the services in the case, may not have had a direct contract with the client, or may not have had a contract that expressly or impliedly gave the attorney a lien on the judgment.”
The case is Carroll v. Interstate Brands Corporation, McCoy, RPI, A094472.
Copyright 2002, Metropolitan News Company