Opinion ID: 1201432
Heading Depth: 1
Heading Rank: 2

Heading: respondent's retaining lien claim

Text: Oklahoma law recognizes two types of lien by which a lawyer may secure payment for services: (1) a statutory charging lien [15] and (2) a common-law general possessory or retaining lien. [16] Different transactions or events trigger the application of these two distinct liens. The charging lien, recognized at common law, has been codified in 5 O.S. 1991 § 6. [17] A lawyer can assert a § 6 charging lien only when he (or she) has commenced an action on behalf of a client or filed an answer containing a counterclaim, and endorsed on the pleading a notice of a lien claim, [18] Either event will allow a charging lien to attach to the ultimate verdict, report, decision, finding or judgment that is entered in a client's action or counterclaim. [19] The charging lien may be actively enforced and does not rest upon mere possession. [20] Proceeds are also subject to the lien. [21] Because Respondent neither initiated an action for Aaron nor filed a counterclaim, with an appropriate endorsement of lien claim notice, she does not meet the controlling criterion for establishing a statutory charging lien. The common-law possessory or retaining lien, [22] on the other hand, has not been adopted by statute. A lawyer may assert a retaining lien against a client's property only when: (1) properly chargeable fees are owing and due and (2) the lawyer is in possession of property not otherwise designated for a specific purpose. [23] A common-law retaining lien cannot be actively enforced by foreclosure. [24] It is but a lawyer's claim to retain a client's papers, money or property in his (or her) possession until the fee is satisfied. [25] A lawyer validly exercising this ancient retention power may not transform the possessory claim to an independent benefit in advance of some agreement with the client. [26] Rule 1.4(b) limits the availability of property for attachment of a retaining lien. [27] The rule clearly does not permit a lawyer to take money or property entrusted to him for a specific purpose and apply it to the attorney's fee claim. [28] But any money or property otherwise coming into a lawyer's hands and upon which a valid attorney's lien has been impressed is free from this restriction. [29] The Bar charged Cummings with taking funds entrusted to her for a specific purpose and with applying them toward a claimed fee in violation of Rule 1.4(b). [30] Respondent asserts that she had impressed a common-law attorney's retaining lien upon the $500 when the special purpose for which the money was held had ceased to exist. This occurred, she urges, when the grandparents abandoned their quest for visitation. At this point, Respondent argues, she no longer owed a Rule 1.4(b) duty. For the assertion of an attorney's lien Respondent argues she relied in good faith upon Republic Underwriters Ins. Co. v. Duncan . [31] The Bar counters that Republic Underwriters does not support Respondent's position. Its argument is threefold. Firstly, the $500 is not subject to an attorney's lien because Respondent acquired the money for a specific purpose. Secondly, Respondent's actions do not reflect she asserted a lien. Rather, she appropriated the money without Aaron's approval or knowledge, without a court order and previous notice to Aaron that additional monies were owed. Lastly, the Bar contends that even if a retaining lien had attached, the deposit of those funds in Respondent's operating account would constitute a release of possession which operated to destroy the lien. Respondent's claim that she was entitled to the $500 because the special purpose  the taking of a deposition  no longer existed is without merit. It matters not that the special purpose comes to an end while the funds are in a lawyer's hands. It is enough that the money was originally designated for a specific purpose. When entrusted with money for a specific purpose a lawyer must not allow his claimed fee for services rendered to conflict with his duties as a fiduciary. [32] Respondent admits that (a) Aaron gave her the $500 for deposition expense, (b) she refused to return it to Aaron after depositing the check in her operating account and (c) Aaron had not agreed to let her use the funds for fee payment. Even though Respondent eventually returned the $500, the restitution of these funds one year after the grievance had been filed is not the delivery of a client's money upon demand within the meaning of Rule 1.4(b). [33] We hold that the Respondent used Aaron's funds for an unauthorized purpose in violation of the cited rule.
The PRT made several findings which dealt with the legitimacy of Respondent's retaining-lien defense and the Bar's effort to discredit her quest for exoneration on the ground that she was asserting a valid claim to the money placed in her operating account. The PRT concluded that Respondent's reliance on Republic Underwriters [34] in her post-hearing brief asserting an attorney's lien was both legally unfounded and factually fabricated, and that her citation to the case was misleading to the panel. The PRT based this conclusion on Respondent's testimony that she impressed the lien after allegedly talking to an unnamed, unknown lawyer in the General Counsel's office who had advised her that she had a right in the money left for deposition expense. The PRT found (a) that at the time Respondent claimed to have asserted an attorney's lien, she was not even aware of Rule 1.4(b); [35] and (b) that neither Respondent nor anyone acting in her behalf (1) had researched whether she had the right to assert a common-law retaining lien or (2) had determined the proper procedure for imposing a lien. The PRT concluded that the parties' post-hearing briefs clearly indicate that she did not even follow the procedure suggested in Republic Underwriters to preserve an attorney's common-law retaining lien. [36] The PRT also found that (a) Respondent appeared to have created the entries on the January 17, 1991 bill so that Aaron would own a balance and (b) not all of the entries appear to correspond to work actually performed. According to Aaron, she never received the bill and saw it for the first time when the Bar sent her Respondent's answer to the grievance, with a copy of the bill appended to that instrument. Aaron disagreed with the amount of time charged for several items on the bill and with the necessity of certain research. Respondent testified that the information was taken off the firm's ledger book and that her only involvement with the case was the typing of an application for a victim's protection order. She stated that the bill would have been typed and mailed in accordance with her regular office procedures. We believe, as did the PRT, that Respondent's frivolous attempt to assert a retaining lien in Aaron's $500 left for deposition expense was simply a sham. Her conduct is reprehensible. It warrants imposition of discipline.