Court Opinion

ID: 9537607
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:20:25.241318+00
Date Added: 2024-06-11T14:56:49.483703
License: Public Domain

CAMERON, Justice,
dissenting.
Because I do not believe an attorney should be permitted to withhold his client’s papers as a means of securing payment of his fee, I dissent.
*549I disagree that our Code of Professional Responsibility contemplates “attorney’s retaining liens.” DR 5-103(A)(l), Rule 29(a), Rules of the Supreme Court, 17A A.R.S., permits a lawyer in specific circumstances to “acquire a propriety interest in the cause of action.’’ (Emphasis added.) Therefore, if anything, it contemplates a charging lien on the proceeds of a case, not a retaining lien on a client’s papers. To the contrary, the Arizona Code of Professional Responsibility implies that an attorney’s retaining lien is inconsistent with his duties to his client:
In any event, a lawyer shall not withdraw from employment until he has taken reasonable steps to avoid foreseeable prejudice to the rights of his client, including giving due notice to his client, allowing time for employment of other counsel, delivering to the client all papers and property to which the client is entitled * * *. DR 2-110(A)(2), Code of Professional Responsibility, Rule 29(a), Rules of the Supreme Court, 17A A.R.S.
The obvious purpose of this rule is to provide a smooth transition of representation in the event a lawyer withdraws, to encourage cooperation with substitute counsel, and to minimize the adverse impact on the interests of the client. Even if the command to deliver all papers and property to which the client is “entitled” may not be self-defining, the mandate to “avoid foreseeable prejudice to the rights of the client” implies that an attorney may not withhold the file to enforce the payment of the attorney’s fees. Withholding documents which a client needs to conduct imminent litigation contravenes the public policy stated in this rule. Such action by former counsel actively produces, rather than avoids, prejudice to the client.
I acknowledge that Restatement (Second) of Agency, § 464(b) (1957) and Restatement of Security, § 62(b) (1941) contain provisions for attorney’s retaining liens. However, we do not follow the Restatement blindly, Small v. Ellis, 90 Ariz. 194, 199, 367 P.2d 234, 237 (1961); Reed v. Real Defective Publishing Co., 63 Ariz. 294, 303, 162 P.2d 133, 138 (1945), and so we are not constrained to adopt particular provisions of the Restatement where we do not believe they reflect sound public policy.
While the ethics committee of our state bar has refrained from taking a position on attorney’s retaining liens, waiting instead for the courts to speak first, see Opinions 81-32, 76-14, 238 (1968), 99 (1962), Committee on Ethics, State Bar of Arizona, a number of ethics committees in other states have found ethical conflicts inherent in attorney’s retaining liens and have condemned their use. Using terms such as “obstructionism” and “harassment,” the Maine Professional Ethics Committee has stated that “ * * * such tactics demean the character of our profession * * * and thus should not be condoned.” They concluded, “ * * * whether or not an attorney’s lien on the file existed at common law, the discharged attorney may not ethically refuse to turn over the file of his former client.” Opinion 39, Maine Bar Bulletin, vol. 10, no. 3, p. 7 (1976). The Louisiana committee on professional ethics has similarly held an “attorney may not condition the release and return [of] papers upon payment of his fee and costs.” Opinion 227, Louisiana Bar Journal, vol. XII, no. 4, p. 336 (1965). Invoking the duty to “avoid foreseeable prejudice to the rights of the client” of DR 2-110(A)(2), the Ethics Committee of the Texas Bar has decided “a lawyer ethically may not attempt to enforce [an] attorney’s lien by retaining possession of his client’s property, money and papers where the client’s legal rights would be prejudiced.” Opinion 395, Texas Bar Journal, vol. 42, no. 5, p. 439 (1979). The Council of the North Carolina State Bar has likewise held “when client discharges attorney in the middle of litigation and requests that attorney return to client his papers, attorney cannot decline to return them until his fee is paid in full.” Opinion No. 7, 241 N.C. 756 (1943), reaffirmed, Opinion 473, The North Carolina Bar, vol. 12, no. 1, p. 15 (1965). Cf. American Bar Association, Committee on Ethics and Professional Responsibility, Informal Opinion 1461 (1980) (acknowledging that in some situations assertion of attorney’s lien *550is unethical because unduly prejudicial to client’s interests).
Based on the same ethical concerns, a California court has rejected the attorney’s retaining lien provisions of the Restatement. In Academy of California Optometrists, Inc. v. Superior Court for the County of Sacramento, 51 Cal.App.3d 999, 124 Cal.Rptr. 668 (1975), an attorney was discharged as a result of a fee disagreement, and refused to turn over the files to substitute counsel unless his fees were paid in full. The matter the attorney had been handling was currently in litigation with an important trial deadline approaching, yet like respondent in the present case, the former attorney claimed the right to withhold the client’s papers under an “attorney’s retaining lien.” The court held this placed the attorney
in the untenable position of insisting upon the * * * right to damage his client’s cause (the same cause which he hitherto espoused and which generated fees to him, both disputed and undisputed), unless the client pays him the disputed fees in full and foregoes his right to honestly litigate the dispute. The client’s cause, sacred as it is to a member of the legal profession, may not be so abused. Id. at 1005, 124 Cal.Rptr. at 672.
The California court indicated that it was a withdrawing lawyer’s ethical duty stated in DR 2-110(A)(2) to avoid foreseeable prejudice to the rights of his client, and concluded, “To enforce the lien in question here would be to condone a violation of the foregoing ethical duties owed by a lawyer to his client, contrary to the public policy of this state.” Id. at 1006, 124 Cal.Rptr. at 672. The court therefore rejected the validity of the attorney’s retaining lien both contractually and as a matter of state common law. See id. at 1003, n. 1, 124 Cal.Rptr. at 671, n. 1.
I agree. In order for such liens to be effective as collection remedies, the retention of the property must be detrimental to the client’s interests. I therefore would hold that an attorney’s retaining lien is contrary to an attorney’s ethical duty to avoid foreseeable prejudice to the client, DR 2-110(A)(2), supra, and should be rejected by the courts of Arizona.
I am troubled not only by the court’s adoption of the attorney’s retaining lien, but also by the manner in which it is to be implemented. The lien is to be limited by an uncertain standard, and the lawyer is invited to litigate the scope of the lien while retaining the entire file. This at least allows the attorney to delay, if not harm, his client’s legal interests. The uncertain standard appears to be based in part on the concept of “work product,” a distinction based on property law — i.e. who “owns” the document, rather than on the ethical duty to protect the client from foreseeable harm. The examples of “work product” cited by the majority are those the withholding of which are likely to cause little prejudice, such as an attorney’s preliminary notes. The withholding of other items which may properly be characterized as “work product” can work enormous prejudice to the client. Besides objecting to the standard adopted, I also disagree strongly with placing the burden on the client to prove the contents of a file to which he is denied access. I would place the burden on the attorney to list all documents in the file, and to demonstrate that withholding them is not likely to prejudice the client’s interests.
Most disturbing about the opinion of the majority is its inability to find on this record that the actions of counsel in the instant case are in conflict with ethical duties, or at least are outside the proper scope of a lawyer’s retaining lien. The record reflects that attorney Alper was counsel of record in a case set for trial in early October 1982. A fee disagreement arose between Alper and his client in September 1982, and a substitution of counsel was allowed by the trial judge on 4 October 1982. The court reset the trial for 26 January 1983, but specifically admonished, “Counsel are advised [this] trial setting will be a FIRM setting.” (Emphasis in original.) With knowledge of this fact, and in the face of expressions by new counsel of his urgent *551need of the files in order to carry on the litigation, attorney Alper refused to turn over any papers. The record discloses that the files contain not only pleadings, depositions and correspondence, but also the client’s original corporate record books and documents evidencing the sale of property at issue in the underlying litigation. Attorney Alper had allowed his former client to approach within days of the trial without access to these important documents as of the time we accepted jurisdiction. I submit that this is an extreme case, in which a client’s legal interests have actually been imperiled, and not an equivocal case as suggested by the majority.
In what I have said I do not imply that Mr. Alper intentionally ignored the Code of Professional Responsibility. Before this case our courts had never discussed the propriety of or limitations upon attorney’s retaining liens. What I do suggest, however, is now that we have had the opportunity to consider the subject, similar conduct should not be condoned.
In the litigation context, not only the client’s legal interests are at stake, but also the state’s interest in orderly and timely litigation. Rule XII(c)(3) of the Uniform Rules of Practice of the Superior Court, 17A A.R.S. is designed to protect these interests upon substitution of counsel. The rule provides,
(c) Withdrawal and substitution ******
(3) No attorney shall be permitted to withdraw as attorney of record after an action has been set for trial, unless there shall be endorsed upon the application therefor either the signature of an attorney stating that he is advised of the trial date and will be prepared for trial, or the signature of the client stating that he is advised of the trial date and has made suitable arrangements to be prepared for trial.
The rule seeks to protect these interests by assuring other arrangements are made to adequately prepare the case for trial. It appears the trial judge neglected the formal requirements of Rule XII(c)(3) in granting the withdrawal of attorney Alper. The trial judge should not have permitted Alper to withdraw until suitable arrangements had been made allowing new counsel to certify he would be prepared for trial. This rule provides independent grounds in the instant case for reversing the denial of the Motion to Surrender Pile. Having granted the substitution, after setting a firm trial date, it was the trial judge’s duty to see that new counsel was not prevented from preparing for trial.
An attorney who claims he is owed a fee is not without a sufficient remedy. The attorney is free to pursue payment of the debt through a separate action, as is any creditor. I feel that remedy best preserves the respective private and public interests. Because I believe retaining liens to be an inappropriate method of collecting attorney’s fees, and particularly so under the facts of this case, I respectfully dissent.