Saturday, December 30, 2017

Lien Times In Idaho

The Idaho Supreme Court held that a discharged attorney had failed to profect the lien he had asserted on opposing counsel in litigation

This appeal from the Ada County district court concerns attorney liens under Idaho Code section 3-205. In March 2016, Eric R. Clark and Clark and Associates, PLLC (collectively, Clark) sued the law firm of Jones Gledhill Fuhrman Gourley, P.A., and two individuals associated with that firm—William Fuhrman and Christopher Graham (collectively, Jones Gledhill). Clark alleged that Jones Gledhill, as Clark’s former opposing counsel, was liable for failing to protect his attorney lien. Jones Gledhill moved to dismiss Clark’s amended complaint (complaint) under Idaho Rule of Civil Procedure 12(b)(6), and the district court granted the motion. In addition to dismissing Clark’s complaint, the district court sealed several documents containing correspondence with and information about Clark’s former clients, denied Clark’s motion to amend, and awarded attorney fees under Idaho Code section 12-121 to Jones Gledhill. We affirm.

The case

The genesis of this appeal is Forbush v. Sagecrest Multi Family Property Owners’ Association, Inc., 162 Idaho 317, 396 P.3d 1199 (2017), a tort case that was recently before this Court in which a water heater emitted hazardous levels of carbon monoxide, killing one and seriously injuring another. In Forbush, Clark initially represented the plaintiffs (Forbush plaintiffs), and Jones Gledhill represented two of the defendants, Anfinson Plumbing and Daniel Bakken (Forbush defendants). As his co-counsel, Clark enlisted the Spence Law Firm (Spence), but after approximately three years, irreconcilable differences came to plague Clark and Spence’s relationship, and Clark withdrew.

After withdrawing, in September 2015, Clark sent a letter to Jones Gledhill, which stated that he was “asserting an attorney lien according to I.C. § 3-205, which attaches to any settlement or verdict. Please include [Clark’s] name on any settlement checks payable to the [Forbush] plaintiffs or any other payments related to a verdict or judgment.”

A settlement between the Forbush defendants and the Forbush plaintiffs was reached in January 2016, at which time the Forbush defendants wrote a settlement check to the Forbush plaintiffs. Without informing Clark of the settlement, Jones Gledhill forwarded the settlement check to Spence. When Clark learned of the settlement and contacted Jones Gledhill, the enforceability of Clark’s claimed lien became disputed. Clark then filed a complaint against Jones Gledhill in March 2016, alleging Jones Gledhill had “breached [its] duty to protect Clark’s lien . . . .” Prior to filing this lawsuit, Clark had also filed lawsuits against Spence and the Forbush plaintiffs with claims arising from their alleged failures to protect Clark’s lien.

Jones Gledhill moved to dismiss Clark’s complaint under Idaho Rule of Civil Procedure 12(b)(6). Clark responded by filing a brief, declaration, and several exhibits revealing information about and correspondence with the Forbush plaintiffs, his former clients. Jones Gledhill moved to strike this information and correspondence. Moreover, the Forbush plaintiffs intervened and moved for the information and correspondence to be sealed as confidential client information. The district court granted Jones Gledhill’s motions to strike and to dismiss. It  further granted the Forbush plaintiffs’ motion to seal. Thereafter, Clark filed a motion to amend his complaint, but the district court denied the motion. Finally, the district court granted Jones Gledhill’s request for attorney fees under Idaho Code section 12-121, finding that Clark had pursued the case frivolously, unreasonably, and without foundation. Clark timely appeals.

No lien here

...the lien must first be created by an attorney’s “commencement of an action, or the service of an answer containing a counterclaim.” I.C. § 3-205. The lien must next attach to “a verdict, report, decision or judgment in his client’s favor and the proceeds thereof,” i.e., the res. Id. Finally, after creation and attachment occur, the lien must be foreclosed by taking the above-discussed affirmative steps in an adjudicative process. Frazee, 104 Idaho at 466, 660 P.2d at 931; accord Skelton, 102 Idaho at 73, 76, 625 P.2d at 1076, 1079.

In this case, Clark’s complaint is clear that, while lien creation and attachment occurred, foreclosure did not. Clark took no affirmative step to reduce his lien to a judgment or court order before the settlement proceeds were delivered to Spence. Clark merely sent a letter to Jones Gledhill claiming an uncertain amount of a lien and filed the instant action seeking to hold Jones Gledhill liable in tort, alleging that Jones Gledhill “owed Clark a duty to protect his lien” but had nonetheless “fail[ed] to protect his lien.” To the extent Clark’s complaint attempted to allege a claim to enforce his lien against Jones Gledhill, it failed to state a claim for relief.

Appellee was awarded attorneys' fees. (Mike Frisch)

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