Lien Not Collusive and Did Not Violate RPC 3-300.
We can sympathize with judgment creditors who then find out about a “secret” attorney’s lien which can often trump those other creditors‘ rights without having any notice of the attorney’s lien. The next case illustrates the point very poignantly.
Agora Concepts, Inc. v. Raynak, Case No. B243907 (2d Dist., Div. 2 Oct. 3, 2013) (unpublished) is a situation where landlord was sued for wrongful eviction/abuse of process by former tenant obtaining a dismissal of a previous unlawful detainer action. The wrongful eviction/abuse of process prompted landlord to sue for breach of contract/guaranty, with tenant/tenant partner’s attorney obtaining an attorney’s lien on any settlement relating to representation of tenant. An unrelated party, judgment creditor, obtained a judgment against tenant in a separate action and filed a notice of lien in the landlord-tenant imbroglio. The parties in the imbroglio settled, with the settlement specifying that the landlord’s $35,000 payment went to tenants‘ attorneys. Lower court approved the settlement over judgment creditor’s objection, triggering an appeal by judgment creditor.
Judgment creditor lost.
The attorney’s lien was not collusive because the client-attorney retainer agreement was inked way before the judgment creditor’s claim surfaced. As far as the claim that attorney did not comply with Rules of Professional Conduct 3-300 requirements (client consent and requirement to advise client it should consult independent counsel with respect to the lien), the appellate court did not believe that the retainer agreement alone had to have these disclosures. The attorneys introduced evidence that they advised the client verbally and in writing about 3-300 requirements and client indicated an acknowledgment by signing the retention agreement. This proof satisfied the 3-300 concern, according to the reviewing court.