Chapter 9: Attorney’s Lien
The Case: Schmitt v. Smith , 118 S.W.3d 348 (Tenn. 2003).
The Basic Facts: McCrary was hired by Plaintiff in a divorce action. When Plaintiff and Defendant reached a partial settlement, the attorney filed a Notice of an Attorney's Lien against the marital residence for her fees through that point. The attorney then filed a petition to enforce the lien.
The Bottom Line:
- "The Tennessee General Assembly created a statutory attorney's lien which provides that '[a]ttorneys and solicitors of record who begin a suit shall have a lien upon the plaintiff's or complainant's right of action from the date of the filing of the suit.' Tenn. Code Ann. § 23-2-102 (1994). This lien 'attaches to any proceeds flowing from a judgment, as long as the lawyer worked to secure that judgment for the client.' Starks v. Browning, 20 S.W.3d 645, 651 (Tenn. Ct. App. 1999). Tennessee Code Annotated section 23-2-103 (1994) provides a lien to an attorney who is substituted as plaintiff's counsel after an action has begun. It provides:
Any attorney or solicitor who is employed to prosecute a suit that has already been brought in any court of record shall have a lien upon the plaintiff's right of action from the date of the attorney's or solicitor's employment in the case; provided, that the record of the case shall first be made to show such employment by notice upon the rule docket of such court, or a written memorandum filed with the papers in the case, or by notice served upon the defendant in the case."118 S.W.3d at 351.
- "From the record, it appears that McCrary asserts her claim of an attorney's lien pursuant to Tennessee Code Annotated section 23-2-102 instead of section 23-2-103. These sections are mutually exclusive, as one applies to attorneys who begin a suit, and the other applies to attorneys hired after a suit has already been brought. In re Pass, 258 B.R. 170, 172 (Bankr. E.D. Tenn. 2001). Because McCrary began her representation of Schmitt after the divorce action had already commenced, her claim of an attorney's lien is pursuant to Tennessee Code Annotated section 23-2-103. However, the analysis under both of the statutes is the same. In re Pass, 258 B.R. at 172." Id. at 351-52.
- "There is no requirement in Tennessee Code Annotated section 23-2-102 that a lawyer include a notation of an attorney's lien in the final judgment. Starks, 20 S.W.3d at 651. The same is true for Tennessee Code Annotated section 23-2-103. Rather, this requirement was promulgated by this Court in Chumbley v. Thomas, 198 S.W.2d 551 (Tenn. 1947), almost fifty years after enactment of the statute. In Chumbley, the complainant-attorney had noted the lien in the final decree. Id. at 551. The decree, however, had been altered before recording so as to remove the notation of the attorney's lien. Id. This Court decided that an attorney may not benefit from a lien unless the lien is noted in the final decree in which the services were rendered. Id. at 552. This Court reasoned that 'otherwise there would be no notice to the public or a subsequent purchaser.'" Id. at 352.
- "The lien in this case is a charging lienFN2 attached to the proceeds generated from the sale of the parties' marital home. 'While a charging lien serves to secure an attorney's fees, it does not function as an adjudication of the rights between the lawyer and his or her client.' Starks, 20 S.W.3d at 652 (citing Pierce v. Lawrence, 1 S.W. 204, 205-06 (Tenn. 1886)). Thus, '[a] trial court may declare the existence of an attorney's lien in the suit out of which the dispute regarding the attorney's fee arose, but ordinarily an attorney, not being a party to the proceeding, may not obtain a judgment with respect to his or her fee in that action.' Id. (citing State v. Edgefield & Kentucky R.R., 63 Tenn. 92, 97 (1874); Perkins v. Perkins, 56 Tenn. (9 Heisk.) 95, 97-98 (1871)).
FN2 An attorney may also have a retaining lien over a client's property that is in the possession of the attorney. Starks, 20 S.W.3d at 650. An attorney may retain such property until the fee dispute is settled or until the client has provided other security. Id. A retaining lien, unlike a charging lien, does not carry an independent right of action against the client. Id."Id . at 353-54.
- "Although an attorney must generally commence a separate proceeding to enforce his or her contractual right to a fee, an exception has been carved out in which the trial court may exert jurisdiction where the money or property that is the subject of the lien "comes within the control of the court in the case in which the services were rendered." Id. at 653. In Starks, the Court of Appeals held that the lien did not fall within the narrow confines of the exception because the lien involved a post-judgment dispute between the attorneys and the client over legal fees and expenses." Id. at 354.
Recent Cases: Coleman v. Coleman (Shawn Coulson, LLP, Wheeler & Franks Law Firm, P.C., Movants in Fee Dispute), No. W2012-02183-COA-R3-CV, 2013 WL 5308013 (Tenn. Ct. App. Sept. 19, 2013) (affirming trial court’s award of attorney fees in divorce case found to be reasonable and necessary and awarding attorney damages, a service charge per the engagement agreement, and prejudgment interest, but denying attorney’s request for costs of collection); Castle v. David Dorris Logging, Inc., No. W2012-00917-COA-R3-CV, 2013 WL 500780 (Tenn. Ct. App. Feb. 11, 2013) (trial court in a tort case does not have subject matter jurisdiction to deal with an attorney’s lien unless the trial court somehow controls the proceeds themselves before the litigation is over).