Is an independent lawsuit required to fix amount of attorney's fee lien?


In Mojtahedi v. Vargas the California Court of Appeal for the Second Appellate District decided a unique issue pertaining to the procedure for enforcing an attorney fees lien against the attorney who is hired to replace the original counsel.

A lawyer represented two plaintiffs in a personal injury matter. After many months of representation, the plaintiffs hired new counsel and discharged the first lawyer. The new attorney settled the case and deposited the settlement checks into his client trust account. Each check was made out to the plaintiffs and to the current and former lawyers’ respective law offices.

The former lawyer then brought a lawsuit against the current lawyer and the two banks that issued the settlement checks. The lawsuit sought payment of the fees the first attorney claimed were the subject of his attorney fees lien.

The trial court sustained the current lawyer’s demurrer to the first lawyer’s complaint without leave to amend. The court held that the former lawyer failed to establish the amount of the attorney fees lien in an independent action against his former client. The court concluded that the new lawsuit fixing the sum of the lien was a prerequisite to seeking to enforce the fee claim. Without the necessary adjudication there was no way of knowing what portion of the fees was legitimately owed to the first lawyer.

The court of appeal affirmed the decision of the lower court. The court noted that an attorney’s lien is only created by a retainer agreement which includes an express provision creating the lien for unpaid fees. However, to enforce the lien, the attorney must bring an independent action against the former client to establish the existence of the lien and its amount.

Here, the court held that records of the time expended were not sufficient to establish that the first lawyer was entitled to a specific amount of the settlement money. Based on this reasoning, the court concluded that the demurrer was properly sustained without leave to amend.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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