Court Opinion

ID: 9697533
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:19:53.533458+00
Date Added: 2024-06-11T18:20:33.365611
License: Public Domain

WAGNER, Associate Judge,
concurring in part and dissenting in part:
The majority reaches a reasonable conclusion on the first issue before the court, but one, which in my view, remains foreclosed to this panel by applicable precedents. See M.A.P. v. Ryan, 285 A.2d 310, 312 (D.C.1971).1 Acknowledging that a different result “might well be impelled,” at least under the cases decided prior to Kellogg v. Winchell, 51 App.D.C. 17, 273 F. 745 (1921),2 the majority concludes that the language in the fee clause in the subject contract created an equitable lien on any settlement recovered. It is with the majority’s determination that Kellogg effected a change in prior decisions that I disagree. A brief examination of the cases which hold otherwise and of the holding in Kellogg makes the point.
*1173In this jurisdiction, language in an agreement between an attorney and client setting compensation at “a sum equal to” a portion of any recovery or equivalent language has been held specifically to be insufficient to create an equitable lien in the client’s recovery. Thurston v. Bullowa, 42 App.D.C. 18, 21, 23, cert. denied, 234 U.S. 756, 34 S.Ct. 674, 58 L.Ed. 1578 (1914) (agreement for compensation in “an amount of at least equal to one third of what would be recovered” held insufficient to establish a charging lien); DeWinter v. Thomas, 34 App.D.C. 80, 84-85 (1909) (contract fixing fee at 15% of a sum of money and of the value of certain property held not to create a lien), cert. denied, 215 U.S. 609, 30 S.Ct. 411, 54 L.Ed. 347 (1910); see also Mellon v. Jones, 60 App.D.C. 269, 270-71, 51 F.2d 431, 432-33 (1931). The “non-possessory lien of an attorney is a creature of contract.” Pink v. Farrington, 67 App. D.C. 314, 316, 92 F.2d 465, 467, cert. denied, 302 U.S. 741, 58 S.Ct. 143, 82 L.Ed. 572 (1937). Therefore, whether a lien is created depends upon the language in the contract.
To establish an attorney’s lien on a fund not in possession, there must be a “distinct appropriation of the fund by the [client], and an agreement that the [attorney] should be paid out of it,” and the contracting party must look strictly to the fund rather than to the client for payment. Id. at 316, 92 F.2d at 467. A contract fixing payment at 15% of the sum of money or a sum equal to the market value of certain property is viewed as merely fixing the measure of liability. DeWinter, supra, 34 App.D.C. at 85. Unless the agreement provides for a “percentage out of the fund recovered, or words equivalent” importing that intention, no assignment will be found to support imposition of an equitable lien. Thurston, supra, 42 App.D.C. at 21-22.
While these principles are reasonably susceptible to a broader interpretation than the earlier cases in this jurisdiction have recognized, those cases have not yet been overruled. Cases cited by the majority to reach a contrary result find an attorney’s charging lien based upon language in the contract specifically providing for payment out of the fund recovered, as required by Thurston. See Friedman v. Harris, 81 U.S.App.D.C. 317, 158 F.2d 187 (1946) (attorney has lien for value of services where contract provides for one-third of “ ‘the sum allowed or recovered’ ”); Continental Casualty Co. v. Kelly, 70 App.D.C. 320, 321, 106 F.2d 841, 842 (1939) (agreement for “33⅛% out of any judgment obtained” is a distinct appropriation of the fund by the client and serves as a contract lien); Sullivan v. Tobin, 42 App.D.C. 430, 433 (1914) (lien attaches to settlement where agreement provided for a fixed percentage of “ ‘all sums recovered or obtained by me as aforesaid’ ”) (emphasis in original); In re Brass Kettle Restaurant, Inc., 790 F.2d 574, 575 (7th Cir.1986) (valid equitable lien created where language used was 40% of any recovery made in the client’s behalf). The language in each of these cases is consistent with the language sanctioned in Thurston, supra, 42 App.D.C. at 21-22.
The line appears to be drawn between words which specifically state that the attorney is to be paid out of a particular fund, and those which only set compensation at a “sum equal to” a portion of the recovery. The former will result in an equitable lien; the latter will not. The requirement imposed by prior law is strict, but remains in effect pending change by the full court. Any policy concerns created by limiting an attorney to a contract action for payment of fees, absent clear contractual language showing creation of a lien, can be met by a careful wording of the contract as the majority suggests.3
It does not appear that Kellogg, supra, overruled the earlier decisions which reject the language used in this case as a vehicle for the creation of a lien. In Kellogg, the court held only that a contingent fee contract created a present right which vested the attorney with an interest in the cause of action sufficient to allow him to intervene in a suit to protect that interest. 51 App.D.C. at 20, 273 F. at 747-48. This is different from recognizing a lien on a par*1174ticular fund which may be used to determine the priority of creditors. Kellogg does not alter prior law with respect to the contractual language necessary to impose an equitable lien on settlement proceeds. The law remains that absent specific contractual language providing for the attorney to be paid out of the fund, thereby assigning the funds to the attorney, no lien will arise. Under present law, the language used here is insufficient.
On the other hand, I agree with the majority that if a valid equitable lien is created by the fee contract, then that lien attaches to any proceeds of settlement within the control of the court. Therefore, I concur in part III of the majority opinion and its reasoning, except insofar as it holds that the agreement which is the subject of this case created a lien on the fund involved.

. M.A.P. holds that we are bound by decisions of the United States Court of Appeals for the District of Columbia Circuit prior to February 1, 1971, and that such decisions and those of this court can be overruled only by the en banc court. 285 A.2d at 312.

. See majority opinion, p. 8.

. See majority opinion, p. 1171, n. 8.