Attorney Lien: Unreported Appellate Decision

by | Jan 15, 2013 | Firm News | 0 comments

In a December 2012 unreported appellate opinion regarding the enforcement of an attorney lien, the Maryland Court of Special Appeals quoted Stewart A. Sutton as follows: “This case illustrates the chaos that results when an attorney and a client have a fee dispute after a personal injury settlement is reached, and the attorney does not follow the proper procedure.  [The personal injury] attorneys should have withdrawn their appearance as plaintiff’s attorney due to their conflict of interest; they should have advised their former client to retain new counsel; and they should have served her an attorney lien via certified mail or personal delivery.  They did none of this.  Instead, they skipped to the final step of a filing a motion to enforce a non-existent attorney lien, which this Court imprudently granted”.   Practice pointer for clients: If your former attorney serves an attorney lien pursuant to Maryland Rule 2-652 on you and files a motion to enforce the attorney lien, you need to retain new counsel immediately to oppose the attorney lien.  There are numerous defenses as to why the former attorney’s lien should not be enforced, including (a) the attorney lien was not properly served on the client; (b) the attorney breached the retainer agreement; (c) the attorney’s fees and expenses are excessive; (d) the attorney was terminated for substantial misconduct; (e) the attorney is only entitled to reasonable fees (quantum meruit) for services rendered; and (f) the attorney is not entitled to the claimed contingency fee.

For example, the contingency fee agreement may state:  “Attorney is hereby retained on a contingent basis and is to receive an amount equal to one-third (33 1/3%) of any amount which is received  for Client by settlement.  Attorney is hereby retained on a contingent basis and is to receive an amount equal to forty percent (40%) of any amount which is recovered for Client by suit or arbitration”.  If a lawsuit is filed and a settlement is reached, the attorney is only entitled to a one-third contingency fee, not a 40% contingency fee.  The reason why is that the operative word “recovered”  has two meanings.  Its broad meaning is “to get back or regain”.   But “recover” also has a narrow meaning in the context of jurisprudence: “to obtain by judgment in a court of law”.  At the very least, the subject retainer agreement is ambiguous and should be construed against the attorney as the drafter.

 

 

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