Opinion ID: 2598937
Heading Depth: 1
Heading Rank: 6

Heading: Jurisdiction over charging and retaining liens

Text: This court has established that [a] district court is empowered to render a judgment either for or against a person or entity only if it has jurisdiction over the parties and the subject matter. C.H.A. Venture v. G.C. Wallace Consulting, 106 Nev. 381, 383, 794 P.2d 707, 708 (1990). The district court's in personam jurisdiction to adjudicate a fee dispute based on a charging lien is derived from the fact that the client has already submitted himself or herself to the court's jurisdiction and the court has personal jurisdiction over the attorney due to the attorney's appearance as the client's counsel of record. Earl v. Las Vegas Auto Parts, 73 Nev. 58, 63, 307 P.2d 781, 783 (1957). Concerning the court's subject matter jurisdiction, the court has in rem jurisdiction to resolve a fee dispute between an attorney and client, which arises from a charging lien, because the attorney's fee is recovered on account of the suit or other action. NRS 18.015(3); see, e.g., Johnston v. Stephens, 206 Ky. 83, 266 S.W. 881, 882 (1924) (stating that the judgment [with respect to a charging lien] in the absence of pleadings, summons, or entrance of appearance would be in rem only); Rhoads v. Sommer, 401 Md. 131, 931 A.2d 508, 523 (2007) (concluding that proceedings to enforce charging liens are proceedings in rem); In re Davis' Estate, 10 Misc.2d 347, 169 N.Y.S.2d 983, 989 (1957) (same). Thus, the court acquires incidental jurisdiction over the parties and the subject matter. See Earl, 73 Nev. at 63, 307 P.2d at 783. Regarding the district court's jurisdiction to adjudicate a fee dispute based on a retaining lien, this court has previously held that a retaining lien is a passive lien that cannot be actively enforced by the attorney in judicial proceedings. Figliuzzi v. District Court, 111 Nev. 338, 342, 890 P.2d 798, 801 (1995); Morse et al. v. District Court, 65 Nev. 275, 282-84, 195 P.2d 199, 202-04 (1948). Because a retaining lien is a passive lien, the client determines whether it wants to extinguish the lien by requesting that the court compel the former attorney to deliver the client's files. Figliuzzi, 111 Nev. at 343-44, 890 P.2d at 801-02. When the client seeks to extinguish the retaining lien, the client must provide adequate or substitute security in exchange for having the files returned. Id. Even when a client requests that the court compel the return of his or her files from the former attorney, and the client does not provide payment for the lien or does not consent to posting substitute security, the court is without jurisdiction to extinguish the retaining lien. Id. Consequently, the district court's jurisdiction to adjudicate a retaining lien is invoked as a result of the client's request to obtain his or her files and consent to provide adequate or substitute security in exchange. See Figliuzzi, 111 Nev. at 339, 890 P.2d at 799 (providing that the district court has jurisdiction to enforce an attorney's retaining lien upon the client's consent); Morse, 65 Nev. at 291, 195 P.2d at 206-07 ([W]here the attorney is brought into court upon application of his client, to compel the attorney to turn over the money or papers upon which he claims a lien . . . the court may ascertain the extent of the lien and enforce it. (quoting 7A C.J.S. Enforcement of Retaining Lien § 290 (1980)) (emphasis omitted)). If the court lacks jurisdiction to resolve the retaining lien, the attorney may keep possession of the former client's files and the attorney's recourse is to file a separate action to recover for the services expended on behalf of the former client. See Don C. Smith, Jr., Cause of Action by Attorney for Recovery of Fee Under Contingent Fee Contract, in 5 Causes of Action 259, 299 (1st ed.1983) (stating that [w]hen there is no lien involved, the attorney must proceed in a separate action at law to resolve the fee dispute); see also 7A C.J.S. Attorney & Client, §§ 419, 422 (2004) (discussing when the attorney and client agreed to the value of the attorney's services prior to representation, [t]he proper form of action by which to enforce payment, generally, is by an action at law on the contract). Having clarified when a district court has jurisdiction to adjudicate an attorney-client fee dispute in the underlying action in which the attorney's services were rendered, we examine whether the district court in this case had jurisdiction to adjudicate the dispute between Jolley Urga and Argentena.