Liens For Attorneys Fees: Attorney’s Lien In Artwork Was Not A Fraudulent Transfer

Clients Can Prefer Attorneys Over Others, Following Reasoning In Wyzard.

            In Stoltenberg v. Sheppard, Mullin, Richter & Hampton LLP, Case No. B271524 (2d Dist., Div. 5 June 20, 2017) (unpublished), plaintiffs/judgment creditors challenged law firm’s attorney’s lien on specific client property (such as artwork) to secure payment of accrued, unpaid legal fees, based primarily on a fraudulent transfer theory.  The Court of Appeal, in a 3-0 opinion, affirmed the trial court’s conclusion that the lien was not preferential.  In doing so, it relied heavily (as did the trial judge) on the reasoning in Wyzard v. Goller, 23 Cal.App.4^th 1183, 1187 (1994), which held that a routine transfer via a bona fide attorney’s lien was not a fraudulent transfer and was not preferential in nature.  We note that the author of the opinion was Orange County Superior Court Judge Kim Dunning, who is sitting by assignment on the 2/5 DCA.