Court Opinion

ID: 5178070
Source: CourtListenerOpinion
Date Created: 2022-01-06 01:19:37.775482+00
Date Added: 2024-06-11T08:26:27.215428
License: Public Domain

JUSTICE COATS
dlssentmg
142 I take the time to wmte in dlssent because I not only believe the majority is wrong but also that its. ruhng today substantially alters the nature and impairs the protections of the "attorney's lien," an eneum-brance on the property of clients that has been available to attorneys for the collection of legal fees in this jurisdiction since before statehood. I also feel compelled to note the irony of having this momentous step taken precipitously, by a bare majority of a five-voting-member court, in a case in which the majority's interpretation of the attorney's lien statute was not advocated by either party or contemplated by the rulings of either the district court or court of appeals, and in which certiorari was granted on entirely different issues and supplemental briefing by the parties was neither sought by the court nor had, My disagreements with both the majority's approach and its resolution of the case are so widespread as to give pause precisely where to begin.
448 Although the ruling that was initially appealed concerned the enforceability of two contingency fee agreements, entered into by the tort plaintiff with two different attorneys, from the start the subtext has always been *678the propriety of resolving the lien and fee claim of the first attorney in the underlying tort action, over his consistent and adamant resistance. As the majority indicates, the plaintiff's second attorney settled her case, took a 40% contingency fee, and moved, in the wrongful death action itself, to void the lien of the first attorney, which had been filed more than a year earlier to secure his own fee claim, In denying the first attorney's motion to strike and to permit him instead to arbitrate his fee dispute with his former client according to the terms of their fee agreement, the district court accepted the contention of the second attorney that in this jurisdiction a legal client can be liable for only one contingency fee, and from that premise, as well as the constructive notice to third parties filed with the court by the first attorney, as provided by statute, it reasoned that the fee dispute implicated by the second attorney's motion to void the lien was solely a matter between the two attorneys over how to divide the single, 40% contingency fee, which the second attorney had already taken ' from the settlement. Further concluding that "it therefore had jurisdiction over the first attorney's lien and fee claim and that the second attorney had standing to challenge the enforceability of that lien, the district court-the court that presided over the see-ond attorney's settlement of the case-found as the trier of fact, onee again as urged by the second attorney, that the first attorney, who had withdrawn from representation at the filing stage of the case, had actually been terminated for wrongful conduct and was entitled to absolutely none of the single contingency fee. Relying on our prior cases permitting recovery of a fee in quantum meruit, the court of appeals reversed, holding that the first attorney had such a claim against his former client and that the district court therefore erred both in treating the matter as a dispute solely between the two attorneys and in ruling on the merits of the first attorney's fee claim.
4 44 The majority deftly avoids addressing the shortcomings of the district court's jurisdictional rationale, as well as the validity of the single contingency fee premise upon which it relied, by ruling that the enforeeability of an attorney's lien may be litigated in the action in which the attorney. performed the services for which he claims a fee, by any third party who holds funds encumbered by the lien. I think it clear, quite apart from the propriety of following this tangent of its own, that the majority errs by mischaracterizing the relevant language of the attorney's lien statute; by abdicating its responsibility to interpret Colorado statutes and case law to a federal trial court, the rulings of which lack precedential value even in.its own jurisdiction, and by misinterpreting the very federal court ruling upon which it relies; by characterizing this new interpretation of the attorney's lien statute as serving the purposes of judicial efficiency and economy rather than depriving the lien holder of the process to which he is entitled in enforcing his lien; and finally by finding that the first attorney's failure to specifically assert the lien statute as a bar, notwithstanding his consistent resistance to the jurisdiction of the: wrongful death court, somehow amounted to gequies-cence in, or waiver of any objection to, the majority's construction of the statute. To fully appreciate the significance and novelty of the majority's holding, some understanding of the history and development of the statutory source of the lien is essentlal o
ﬂ 45 By statute in this Jumsdlcmon, attorneys have long been provided with what we have refetfed to as charging and retaining liens, to assist in securing payment of their reasonable attorney fees, see § 12-5-119, 120, CR.S. (2015), but no ﬁght to an attorney's lien beyond these 'statutory rights exists in the jurisdiction, People v. Brown, 840 P.2d 1085, 1087 (Colo.1992). With regard to the former category, the statute grants attorneys a lien on any money, property, choses in action, or claims and demands in their hands, on any judgment they may have obtained or assisted in obtaining, and on any claims and demands in suit for any fees due or to become due from any client. § 12-5-119.
( 46 With regard to judgments in particular, the charging lien statute automatically gives the attorney a lien, or encumbrance, on the judgment, to the extent of his reasonable fees remaining due and unpaid. People ex rel. MacFarlane v. Harthun, 195 Colo. 38, 581 P.2d 716, 718 (Colo.1978). The lien attaches *679immediately upon obtaining the judgment, and once the judgment is secured, as between attorney and client, nothing more need be done to cause the lien to be enforceable. Id.; see also Collins v. Thuringer, 92 Colo. 433, 21 P.2d 709, 709 (Colo.1933). Before the lien can be enforced against third parties, however, notice must be given. Harthun, 581 P.2d at 718. Although not initially the case, see Fillmore v. Wells, 10 Colo. 228, 15 P. 343, 346 (Colo.1887) ("It is unfortunate that the statute neither specifies a time for the enforcement of the lien, nor a method of giving notice of the purpose to do so."), the statute itself has long provided attorneys with a method for putting third parties on constructive notice.
147 In the case of "demands in suit" and judgments obtained in whole or in part by any attorney, that attorney is permitted to file a notice of his claim as lienor with the clerk of the court in which the cause is pending, and that notice, when duly entered of record, constitutes notice "to all persons and to all parties, including the judgment creditor, to all persons in the case against whom a demand exists, and to all persons claiming by, through, or under any person having a demand in suit or having obtained a judgment." § 12-5-119; see also In re Estate of Benney, 790 P.2d 319, 322-23 (Colo.1990) (filing "notice of lien" with clerk of court wherein the action is pending constitutes notice to all third parties that attorney has an interest in the funds subject to the lien and renders the lien enforceable against third parties who may come into receipt of funds subject to the lien); Collins, 21 P.2d at 710 ("The provision [of the statute] concerning notice is intended to give constructive notice, so as to preserve the attorney's lien in the event that the judgment debtor should settle the judgment without having actual notice of the lien claim, or some third person, without having such actual notice, should acquire an interest in the judgment or in its proceeds."). As we have strongly implied, see Gee v. Crabtree, 192 Colo. 550, 560 P.2d 835, 836 (Colo.1977) (distinguishing asserting from enforcing the lien), and as the court of appeals has persuasively reasoned, see In re Marriage of Mitchell, 55 P.3d 183, 186 (Colo.App.2002) (finding that action to enforce attorney's lien was not initiated within applicable statute of limitations by merely filing notice of the lien), the statute cannot be reasonably interpreted to intend that filing notice of the attorney's claim as lHenor with the clerk of the court in which the cause is pending serves to initiate enforcement of the lien, see Seitz v. Seitz, 33 Colo.App. 180, 516 P.2d 654, 655-56 (Colo.App.1973) (setting aside order of underlying district court limiting enforceability of lien of first attorney on motion of second attorney where first attorney merely filed notice of lien in original action but took no action to enforee it).
48 With regard to the actual enforcement of a charging lien, however, the statute provides little direction. Unlike other statutes creating liens, which typically specify such things as a time period within which the Henholder must commence foreclosure or en-foreement, the parties necessary for such proceedings, and any required allegations of the complaint, see, e.g., §§ 88-20-107 to - 108, C.R.S,. (2015) (liens on various personal property); §§ 38-22-110 to -115, CRS. (2015) (mechanies' lens), the attorney's charging lien statute indicates merely that "[sJuch lien may be enforced by the proper civil action," § 12-5-119. In the context of an attorney seeking to obtain an order and judgment for his fees in a dissolution of marriage proceeding, we previously held that the statutory term "proper civil action" included the civil action that gave rise to the attorney's lien claim. Gee, 560 P.2d at 836. Finding that to restrict the means of enforcement of an attorney's lien solely to independent civil actions would be a waste of judicial time and contrary to the legislative intent reflected by the statutory language, we held in that case that the attorney's charging lien could not only be asserted but could also be enforced in the civil action that gave rise to the lien claim. In Gee, we emphasized, however, that the attorney was in no way limited to enfore-ing his lien in the action giving rise to his fee claim, but could choose, instead, to enforce it in an independent action if he wished. Id.
149 Contrary to the characterization of the majority, the express language of the statute provides that "such lien may be en: forced by the proper civil action"-not that *680the validity or enforceability of the lien may be challenged in a proper civil action. From the title, structure, history, and clear purpose of the statute, there can be absolutely no doubt that the statutory lien belongs to and is solely for the benefit of the attorney attempting to secure payment of fees due or to become due him from his client. See § 12-5-119. The attorney's lien statute itself is unconcerned with, and simply fails to provide a vehicle for others to challenge, the validity of an attorney's lien, and we have never suggested otherwise. See id. In Gee, which the majority twists to its own ends, we clearly found there to be no good reason to force an attorney to proceed by independent action should he find it equally satisfactory to enforce his lien in the underlying action itself, 560 P.2d at 836. Nothing in Gee even remotely suggests, however, that the statute provides a vehicle for others to challenge the validity of an attorney’s lien, and espemally not others who are not even party to 'the underlying civil action, merely because they have come into possession of potentially encumbered property. See id.
T50 Even the federal district court's ruhng in Dietz v. University of Denver, upon which the majority so heavily relies, provides no support for its expansive holding today. Nos. 95-ev-02756-WDM-OES, 2011 WL 723118 (D. Colo. Feb. 22, 2011). In Dietz the propriety of litigating the enforcement of the attorney's lien in the underlying action was not contested by the attorney herself, but rather by the client's successor attorney, after the lien claim had already been heard, on the somewhat disingenuous ground that because the lien contest had been initiated by the client's motion, the action in the underlying court was not a proper one, and any subsequent attempt by the first attorney to enforce would by then be time-barred. Id, at *10. The court's ruling in Dietz stands, at most, for the unremarkable proposition that the enforcement of a lien claim is properly put at issue by the attorney's willing defense of a motion by his client in the underlying action to dismiss the lien, just as it would be by a motion to enforee actually filed by the attorney claiming the fee, Id, at *11. No more than the federal court in Dietz have we ever suggested any particular formalities according to which an attorney must select the court in which the underlying cause is pending to enforce his lien. It is nevertheless clear that enforcement of the lien in the underlying action cannot be proper without at least the agreement or acquiescence of the attorney to whom <the lien is statutorily granted.
[51 The mere fact that the attorney's lien statute itself does not provide a method for challenging the validity of such a lien does not, of course, leave the holders of potentially encumbered property without recourse or forever subject to an action to enforce the lien, As the court of appeals has held, see Mitchell, 55 P.3d at 186, precisely because the statute cannot be reasonably interpreted to intend that filing notice of the attorney's claim alone serves to initiate enforcement of the lien, the attorney must take some affirmative action to enforce the lien within the pemod allowed by the applicable statute of limitations. In addition, the legislature has separately provided for an expedited process for having spurious liens declared invalid and removed. See §§ 88-85-201' to -204, C.R.S. (2015). FmalIy, nothing in the attorney s lien statute purports to limit a holder of encumbered property from seekmg, in an appropriate forum and according to the appropriate civil process, a declaration of the amount of any fees remaining due and owing to a claiming attorney.
152 Quite apart from, the fact that I consider the majority's interpretation -of the statute untenable, I find its reliance on "judicial efficiency and economy" as support for that interpretation to be entirely unjustified, In Gee we relied on similar considerations in reference to a fee determination by the court overseeing the litigation in which the fee was earned. See 560 P.2d at 836. Rather than the enforcement of his lien by an attorney representing a party to the action, the majority's expansive interpretation contemplates that any of a number of other persons, who are themselves neither parties nor attorneys representing parties, be authorized to hail into the underlying action an attorney, who is himself neither a party nor any longer representing a party to the action. The rationale of Gee for permitting the enforcement of an *681attorney's lien by the court with first-hand knowledge of the representation in question and control over the parties and any pending settlement, is a far ery from what the majority proposes today; and I, for one, do not consider short-cireuiting the process that would be due other civil litigants, like discovery, laudable as promoting judicial efficiency and economy. .
€ 58 Finally, I fail to understand how, notwithstanding his emphatic objections at every possible turn to the jurisdiction of the wrongful death court, the failure of the first attorney to specifically assert the provisions of the attorney's lien statute as a bar to proceeding in the underlying action helps the majority to be persuaded by the federal district court's analysis. Maj. op. 180 ("For several reasons, we are persuaded by this analysis."). Until the majority's reliance on it today, the "proper civil action" language of the attorney's. lien statute has never been offered as a Justification for hearing the motion to void the lien over the lien-claimant's resistance, and therefore, until today, there has never been any cause to contest. this interpretation of 'the statute. More to the point, however, any suggestion of waiver or failure to preserve would seem to militate against a need to invoke or interpret the statute at all, rather than militate in favor of the majority's expansive interpretation of it.
54 Perhaps the only thing about which the majority and I agree is the lack of any need to opine concerning the single contin-geney fee question on Which certiorari was actually granted. See maj. op. "I 40. Because I believe there was absolutely no basis for litigating the second attorney's motion to void as part of the underlying action, I would affirm the judgment of the court of appeals, vacate the findings and conclusions of the district court, and leave to the rulemaking process resolution of the host of ethical and procedural issues surrounding the permissibility and enforceability of separate contin-geney fee agreements with successive attorneys in the same litigation.
[ 55 I therefore respectfully dissent.
I am authorized to state that JUSTICE EID joins this dissent.