Perfection and Enforcement of Attorney's Liens in Colorado

• Publication year: 1997
• Pages: 57
• Citation: Vol. 26 No. 3 Pg. 57

26 Colo.Law. 57 Colorado Lawyer 1997.

1997, March, Pg. 57. Perfection and Enforcement of Attorney's Liens in Colorado

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57

Vol. 26, No. 3, Pg. 57

The Colorado Lawyer
March 1997
Vol. 26, No. 3 [Page 57]

Specialty Law Columns
The Civil Litigator
Perfection and Enforcement of Attorney's Liens in Colorado
by Tami D. Cowden, Serge L. Herscovici

Column Ed.: Richard L. Gabriel of Holme Roberts & Owen Denver - (303) 861-7000

Those wishing to submit articles for publication are encouraged to call the column editor. This month's article was written by Tami G. Cowden, Littleton, senior attorney at Legal Research Associates, (303) 794-8402; and Serge L. Herscovici, Littleton, a shareholder of the Herscovici Law Firm, P.C., (303) 730-7703

In a perfect world, all clients would have both the inclination and the wherewithal to pay immediately for all attorney fees and costs incurred in the course of litigation In a perfect world, however, there would be no litigation. Accordingly, attorneys are often faced with the prospect of taking legal action to secure payment for their services and disbursements. As the Colorado Supreme Court said in 1887:

The custom of advocates to render their services quiddam honorarium does not exist in this country. We doubt very much if counsel for appellant, who discourse with such evident admiration upon this practice as it existed centuries ago in Rome, in France, and in England, would be willing to see it established in Colorado. The advocate or counselor who should here to-day imitate Cicero, and give his services gratuitously, relying solely upon the gift which, in the language of Sir John Davy, "guieth honor as well to the taken as the guier," would soon find the wolf at his door, unless, like Cicero, he had other sources of revenue. It may, from counsel's standpoint, be a humiliating fact, but it is a fact, nevertheless, that in this respect the legal profession occupies the status with us of other employment followed for a livelihood. The attorney is considered worthy of his hire, and is not in danger of disbarment if he contract in advance for his fees, and collect them by suit, when necessary, after the service is rendered.1

Attorney's liens are a recognition that "an attorney is worthy of his [or her] hire." This article discusses the two types of attorney's liens available in Colorado and the differences between them, the manner of perfection of such liens, and their enforcement. The article also reviews the ethical implications of the enforcement of such liens.

Attorney's Liens Under Colorado Law

Common law attorney's liens are not recognized in Colorado, and no attorney's lien exists apart from statute.2 The statutory attorney's liens, however, are "in some important particulars . . . much more complete and satisfactory than [the attorney's lien] at the common law."3

The two types of statutory attorney's liens available in Colorado are the charging lien and the retaining lien.4 A charging lien may be asserted against any money, property, choses in action, or claims and demands in the attorney's hands; on any judgment the attorney may have obtained or assisted in obtaining, in whole or in part; and on any and all claims and demands in suit. Under this type of lien, the attorney may charge against the client's property for satisfaction of unpaid fees. A retaining lien may be asserted against papers of the client in the attorney's possession and on money due the client that is in the hands of an adverse party. This lien creates an inducement to the client to pay the attorney fees and costs. The attorney is not permitted, however, to use the client's property to satisfy directly the debt owed.

There are basic similarities between the attorney's charging lien and the retaining lien. Both can be waived by the attorney.5 The liens probably do not attach to property in the attorney's possession that belongs to another person and to which the client has no claim.6 Any proceeding initiated to establish an attorney's lien is equitable in nature, and, thus, there is no right to a jury trial.7 Finally, misuse of either lien can result in disciplinary action.8

While the applicable statutes are not clear as to the differences between charging and retaining liens, case law has revealed several distinctions.

Charging Liens

The charging lien is created by CRS § 12-5-119, which provides, in pertinent part:

All attorneys- and counselors-at-law shall have a lien on any money, property, choses in action, or claims and demands in their hands, on any judgment they may have obtained or assisted in obtaining, in whole or in part, and on any and all claims and demands in suit for any fees or balance of fees due or to become due from any client.9

An attorney may charge against the identified types of property for the balance of legal fees incurred, and also for the balance of costs or other disbursements by the attorney.10 The attorney may do so for as long as the attorney has the "money, property, choses in action, or claims and demands in suit" in his or her possession, until the balance of fees owed is paid in full. Moreover, in general, the attorney may charge against the identified types of property fees that were incurred in matters other than the particular matter to which the property in question relates.11

An exception to this general rule, however, concerns judgments. Where the attorney is charging against a judgment for payment of the fees, the fees must have been incurred in the course of the representation relating to that judgment.12 In such a case, the right to the charging lien rests on the equity of an attorney to be paid his or her fees and disbursements out of the judgment obtained as a result of his or her service and skill.13

Pursuant to CRS § 12-5-119, an attorney also may assert a charging lien against a "claim" or "demand in suit" that is not in his or her possession. In order to do so, however, an action...