Monday, August 27, 2007

Lien Times

A Maryland lawyer and his law firm represented a client in a federal employment discrimination lawsuit. The employer initially prevailed and the client filed a chapter 7 bankruptcy, listing the lawyer as an unsecured nonpriority creditor owed $190,000 for legal services. The bankrutcy court granted a discharge. The lawyer continued to represent the client for a time thereafter but eventually withdrew.

The lawyer then sent notice of his attorney's lien to the client and the employer asserting a lien on "any judgment, award or settlement." The client, acting pro se, prevailed on appeal and secured a remand. A jury awarded her damages of $126,006. The client sought an award of fees and costs and the lawyer sought to intervene. Both requests were denied. The lawyer then sued in state circuit court asserting a lien against the judgment.

The Maryland Court of Appeals held that the retainer agreement did not extinguish the statutory right to the lien, which "takes effect upon the commencement of representation." Further, the statutory "attorney's lien survives a bankruptcy discharge even if no notice of the intent to claim a lien was given prior to the bankruptcy..." A lien is an in rem action that can be asserted against the judgment. The in personam claim of the lawyer was discharged by the bankruptcy but not the in rem claim against the award. Finally, the client's due process rights were not violated.The case was remanded to figure out the math. (Mike Frisch)

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