Friday, February 17, 2017

No Lien On Property Not Owned By Former Client

The North Dakota Supreme Court rejected the assertion of an attorneys' lien because the former client had no interest in the subject real property.

DeWayne Johnston, individually, and as registered agent of Johnston Law Office, P.C., appeals from a judgment invalidating a notice of attorney lien recorded against Johnston's former client and ordering Johnston Law Office and Johnston, individually, to pay $1,330 in costs and attorney fees. We modify the judgment to relieve Johnston of personal liability and affirm the judgment as modified.

Wayne and Janel Nusviken acquired real property from Johnston's former client Barbara McDermott on October 2, 2013. On October 8, 2013, Johnston recorded a "notice of attorney lien" against McDermott. The notice of attorney lien included the legal description of Nusviken's property and stated McDermott owed Johnston nearly $66,000 in attorney's fees relating to Johnston's representation of McDermott in earlier matters unrelated to the sale of the property.

The Nusvikens petitioned the district court to invalidate the notice of attorney lien, arguing McDermott no longer owned any interest in the property. The court issued an order to show cause directing Johnston to appear and show why the notice of attorney lien should not be declared void. At the hearing, Johnston argued the notice of attorney lien was not a nonconsensual common-law lien but a valid attorney's lien under N.D.C.C. § 35-20-08, and therefore, the court did not have jurisdiction to invalidate the lien. In response Nusviken's attorney stated the notice of attorney lien was invalid because McDermott no longer had an interest in the property and no attorney-client relationship existed between Johnston and the Nusvikens. The court concluded the purported lien was a nonconsensual common-law lien and not a valid attorney's lien because it failed to satisfy the statutory requirements for an attorney's lien under N.D.C.C. § 35-20-08. The court invalidated the lien and ordered the Johnston Law Office and Johnston, individually, to pay the Nusvikens $1,330 in costs and attorney's fees.

No lien on thee

We agree with the district court's analysis. The notice of attorney lien recorded by Johnston against McDermott referenced two cases in which Johnston represented McDermott. Johnston did not submit any evidence indicating a judgment was awarded in favor of McDermott or that she was due any money in those cases. McDermott no longer had an interest in the real property when Johnston recorded the notice of attorney lien, nor did Johnston represent McDermott in the land sale to the Nusvikens. Johnston appears to argue it had a valid attorney's lien simply because the document is titled "notice of attorney's lien." As the district court noted, however, the document on its face failed to meet the requirements of N.D.C.C. § 35-20-08. The district court did not err by invalidating Johnston's "notice of attorney lien."

Johnston argues the district court lacked jurisdiction because under N.D.C.C. § 35-35-05(1) only those who have property subject to nonconsensual common-law lien may petition the court to invalidate the lien. Johnston also argues that before entering the order to show cause the court was required to make a finding that the Nusvikens were subject to a nonconsensual common-law lien...

Here, there was no attorney-client relationship between Johnston and the Nusvikens. We decline to extend Amundson to an attorney's improper or unethical actions toward parties who are not clients. We therefore modify the judgment to relieve DeWayne Johnston of personal liability.

(Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2017/02/the-north-dakota-supreme-court-rejected-the-assertion-of-an-attorneys-lien-because-the-former-client-had-no-interest-in-the-s.html

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