Chapter 43 - § 43.3 • STATUTORY CHARGING LIEN — C.R.S. § 13-93-114

• Jurisdiction: Colorado

§ 43.3 • STATUTORY CHARGING LIEN — C.R.S. § 13-93-114

The first type of attorney lien is a charging lien and is governed by C.R.S. § 13-93-114, which provides as follows:

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. In the case of demands in suit and in the case of judgments obtained in whole or in part by any attorney, such attorney may file, with the clerk of the court wherein such cause is pending, notice of his or her claim as lienor, setting forth specifically the agreement of compensation between such attorney and his or her client, which notice, duly entered of record, shall be notice to all persons and to all parties, including the judgment creditor, to all persons in the case against whom a demand exists, and to all persons claiming by, through, or under any person having a demand in suit or having obtained a judgment that the attorney whose appearance is thus entered has a first lien on such demand in suit or on such judgment for the amount of his or her fees. Such notice of lien shall not be presented in any manner to the jury in the case in which the same is filed. Such lien may be enforced by the proper civil action.

C.R.S. § 13-93-114.

A charging lien allows an attorney to assert a lien for payment of legal services rendered against property or funds the lawyer has assisted or is assisting the client to obtain. CBA Formal Ethics Opinion 110, "Assertion of Attorney's Charging Lien/Security Interest in Property" (Jan. 19, 2002, rev. May 19, 2002).

"The purpose of the charging lien statute is to enable a lawyer to preserve the lawyer's right to payment and to place others on notice that the attorney is asserting an interest in property or in a judgment that is subject to the lien." Id. See also In re Estate of Benney, 790 P.2d 319, 322 (Colo. 1990) (stating that the purpose of the charging lien is to satisfy the attorney's equitable claim for services rendered to the client).

The charging lien accrues from the moment an attorney commences services. In re Marriage of Berkland, 762 P.2d 779 (Colo. App. 1988). However, a lien cannot be created by the mere fact that an attorney is entitled to be paid for his or her services. In re Forrest A. Heath Co., 159 F. Supp. 632, 637 (D. Colo. 1958). Rather, the statute allows the attorney to place a lien on the money recovered by the attorney's client for the attorney's bill of costs. Miller v. Houston, 146 P. 786 (Colo. App. 1915).

Colorado case law has interpreted the statute as identifying three scenarios in which a charging lien may arise. Those scenarios are as follows:

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

Gaudio, 260 F.2d at 335; Cope v. Woznicki, 140 P.3d 239 (Colo. App. 2006).

The terms identified in the statute have been the subject of discussion in Colorado case law. For example, courts have held that by distinguishing between "judgments" and "claims and demands in suit," it is not necessary to obtain a judgment in order for the attorney lien to attach. Cope, 140 P.3d 239. It has also been held that a claim must be "in suit" before a lien will attach. Gaudio, 260 F.2d at 335. In other words, a charging lien will not attach prior to the commencement of a suit. Id. "The term 'suit' is a very comprehensive one and is said to apply to any proceeding in a court of justice by which an individual pursues that remedy which the law affords him." Forrest...