Opinion ID: 2973639
Heading Depth: 2
Heading Rank: 4

Heading: Attorney lien

Text: The final issue on appeal is whether the bankruptcy court properly allowed the Rossi Law Firm, which represented Hoffman during the divorce proceedings, a lien on the proceeds from the sale of the Marital Farm. Kasben argues that the Rossi Firm’s lien was not properly perfected, but we find this claim to be without merit. Michigan law provides for equitable attorney liens that are automatically considered perfected. George v. Gelman, 506 N.W.2d 583, 584 (Mich. Ct. App. 1993) -9- No. 05-1701 Kasben v. Dery (holding that the “special or charging lien is an equitable right to have the fees and costs due for services secured out of the judgment or recovery in a particular suit”). As the district court in this case explained, the Rossi Firm lien became secured and perfected when the divorce court granted Hoffman her award of $288,000. The Kasbens also claim that the attorney lien, under Michigan law, cannot be placed upon the sale of their property. An attorney’s charging lien is placed on judgments awarded to a client. Id. at 585. Hoffman, through the assistance of the Rossi Firm, received a $288,000 judgment in her favor. Because the Rossi Firm’s fees were deducted from the proceeds of the sale of the farms—instead of from the $288,000 award to Hoffman—the charging lien appears at first glance to have been placed on Kasben’s property. Kasben, however, was not a client of the Rossi Firm, so this type of equitable lien cannot be placed directly on his property. We conclude that the Kasbens’ argument fails upon further analysis. Throughout the divorce proceedings, the state court has continually awarded Hoffman her attorney fees. Kasben, 2005 WL 678158, at . Because Kasben has not yet paid these fees, the bankruptcy court properly considered the award to Hoffman in the judgment of divorce to include not only the $288,000, but also the money to pay her attorneys. The bankruptcy court was therefore not placing a lien on property that belonged to Kasben, but on the proceeds from the sale of the properties that would be distributed to both parties. We therefore hold that the bankruptcy court did not err when it deducted the Rossi Firm’s fees from the sale proceeds of the Marital Farm. III. CONCLUSION - 10 - No. 05-1701 Kasben v. Dery For all of the reasons set forth above, we AFFIRM the judgment of the district court regarding the allocation of the selling costs, interest, and attorney fees, but REMAND the case for any further proceedings that may be necessitated by ongoing state-court rulings in the divorce case. - 11 -