Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-03754/USCOURTS-cand-4_05-cv-03754-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MELINDA GARCIA,

Plaintiff,

v.

AMBER HASKETT,

Defendant.

 /

No. C 05-3754 CW

ORDER DENYING

PLAINTIFF'S

MOTION TO

EXTINGUISH LIEN

Plaintiff Melinda Garcia moves to extinguish a lien which

Defendant Amber Haskett has filed in a case in Contra Costa County

Superior Court, Long v. Sunrise Senior Living, Inc., No. MSC 04-

1664, where Plaintiff Garcia is the attorney of record for the

plaintiffs. Defendant opposes the motion to extinguish. The

matter was taken under submission on the papers. Having considered

all of the papers filed by the parties, the Court DENIES

Plaintiff's motion to extinguish. 

BACKGROUND

On or around August, 2003, Plaintiff and Defendant formed

Garcia & Haskett, LLP (the Partnership), a California limited

liability partnership engaging in the practice of law. In July,

2004, the Partnership entered into a written fee agreement to

represent Mary Long in connection with her claims for personal

injury and financial loss against Sunrise Assisted Living. Garcia

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Decl. ¶ 3. The fee agreement was signed by Defendant, but

Plaintiff says that she served as the lead attorney. Id. The

Partnership agreed to represent Ms. Long on a contingency basis. 

On January 17, 2005, Plaintiff allegedly told Defendant that

she intended to dissolve the Partnership. Am. Compl. ¶ 10. 

Plaintiff and Defendant entered into discussions regarding the

dissolution of the Partnership. During the negotiations, Ms. Long

decided that she would like Plaintiff to continue representing her. 

Garcia Decl. ¶ 4. On or about March 1, 2005, Plaintiff and

Defendant agreed to dissolve the Partnership pursuant to an

"Agreement Dissolving Partnership," which was made effective as of

February 1, 2005. See Am. Compl., Ex. E, Dissolution Agreement. 

With respect to Long, the Dissolution Agreement provides as

follows,

Haskett will be granted 5% of the net recovery to Garcia and

Garcia will be granted the remainder. For purposes of this

Agreement, Haskett acknowledges that on February 22, 2005 the

clients in this matter chose Garcia to be their attorney. 

Garcia is to handle the case and, therefore, Haskett shall

have zero involvement with the case upon dissolution of the

Partnership. Garcia agrees, however, to immediately provide

Haskett with notice of settlement or disposition of the case

and to provide Haskett with an accounting regarding the

calculation of any share of the recovery due Haskett under

this Agreement.

Dissolution Agreement § 2.07(f). After agreeing to the

dissolution, Plaintiff formed the Garcia Law Group (GLG) and

Defendant formed the Haskett Law Firm (HLF). According to

Plaintiff, Ms. Long executed a new written fee agreement with GLG. 

On September 16, 2005, Plaintiff filed a complaint in this

Court alleging, among other claims, that Defendant illegally

intercepted Plaintiff's confidential email communications during

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the negotiation of the Dissolution Agreement. Among other

remedies, Plaintiff seeks rescission of the Dissolution Agreement. 

She alleges that she would not have agreed to Defendant's

proportion of the net recovery in Long had she known Defendant was

reading her email. Am. Compl. ¶ 65. 

On February 24, 2006, Defendant filed a notice of lien in

Long, alleging that the Dissolution Agreement "contractually

provides Lienholder with a claim against any settlement, recovery

or judgment in this action." Pl.'s Req. for Judicial Not., Ex. A,

Long, Notice of Lien. Defendant also alleges that the fee

agreement entered into between the Partnership and Ms. Long

contains provisions substantiating her lien. Id. Defendant

declares that had the Partnership not dissolved in accordance with

the Dissolution Agreement, she and Plaintiff would have divided any

Long profits in half, and therefore that she still has an interest

in Long as a successor-in-interest to the Partnership. Haskett

Decl. ¶ 5, 6, 10. 

The amount in controversy in Long is "in the millions of

dollars," and the case is scheduled for a mediation session on

April 4, 2006. Garcia Decl. ¶ 5, 8. Plaintiff believes that if

the lien is not extinguished, it "will disrupt the mediation"

because it will "tie up any settlement proceeds such that the

Client will not receive any amount," and also tie up compensation

of Plaintiff's new co-counsel. Garcia Decl. ¶ 8. 

DISCUSSION

In California, an attorney's lien is created only by contract,

"either by an express provision of an attorney fee contract or by

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implication where the retainer agreement provides that the attorney

is to look to the judgment for payment for legal services

rendered." Carroll v. Interstate Brands Corp., 99 Cal. App. 4th

1168, 1172 (2002). In Hansen v. Jacobsen, 186 Cal. App. 3d 350,

354-55 (1986), the court held that a "previously discharged

attorney who has a contractual lien on a prospective judgment may

file a notice of lien in the pending action." (Emphasis in

original.) 

Although filing a notice of lien in the underlying action is

not essential, an attorney may choose to do so, and "the common

practice of doing so has been held permissible and even advisable." 

Carroll, 99 Cal. App. 4th at 1172. However, because the discharged

attorney is not a party to the underlying action, "a subsequent,

independent action is required to establish the amount of the lien

and enforce it." Hansen, 186 Cal. App. 3d at 356. The trial court

in the underlying action has no jurisdiction to determine the

existence or validity of an attorney's lien, nor can it entertain a

motion to terminate the lien or to expunge the notice of lien. 

Carroll, 99 Cal. App. 4th at 1173-74. The notice of lien is thus

"essentially a 'superfluous document,'" the principle function of

which "seems to be to assist a discharged attorney who faces the

risk that a former client may 'settle around' the lien." Id. at

1176-77. 

Under California law, therefore, Plaintiff may not bring a

motion to extinguish the notice of lien in Long, and its validity

must be determined in a "subsequent, independent action." 

Plaintiff's justification for this Court's exercise of jurisdiction

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is that otherwise she will be left without recourse to expunge the

lien at this time. The court in Carroll recognized that the state

of the law provides no procedural safeguard to protect clients from

the filing of a false notice of attorney's lien, but decided that

"the task of designing protective procedures should be left to the

Legislature." 99 Cal. App. 4th at 1177. Based on principles of

federalism and comity, the Court likewise declines to entertain

Plaintiff's motion to extinguish the lien which Defendant has filed

in Long. 

IT IS SO ORDERED.

Dated: 3/23/06

 

CLAUDIA WILKEN

United States District Judge

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