Colorado § 13-93-115 - Other property to which lien attaches.

§ 13-93-115. Other property to which lien attaches.

An attorney has a lien for a general balance of compensation upon any papers of his or her client that have come into his or her possession in the course of his or her professional employment and upon money due to his or her client in the hands of the adverse party in an action or proceeding in which the attorney was employed from the time of giving notice of the lien to that party.

Source: L. 2017: Entire article added with relocations, (SB 17-227), ch. 192, p. 701, § 1, effective August 9.

Editor's note: This section is similar to former § 12-5-120 as it existed prior to 2017.

ANNOTATION

Law reviews. For article, "The Treatment of Attorney's Liens in Colorado", see 16 Colo. Law. 623 (1987). For article, "Perfection and Enforcement of Attorney's Liens in Colorado", see 26 Colo. Law. 57 (Mar. 1997). For article, "Ethical Considerations of Attorney's Liens", see 31 Colo. Law. 51 (Apr. 2002). For article, "Recording Charging Liens Against Real Property: When, Not Whether", see 31 Colo. Law. 121 (Oct. 2002).

Annotator's note. Since § 13-93-115 is similar to former § 12-5-120 and laws antecedent to that section, relevant cases construing those provisions have been included in the annotations to this section.

It was not the intention of the general assembly to abolish the well-established distinction between the two classes of liens (i.e. retaining liens and charging liens) and to create a lien upon a judgment and its proceeds to secure the payment of attorney's fees earned in matters not at all connected with the suit in which the judgment is rendered. In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo.), aff'd sub nom. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir. 1958).

Under Colorado law, the common law attorney's lien is not preserved and no lien exists apart from statute. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir.), aff'g In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo. 1958).

Colorado has two statutory provisions pertaining to attorney's liens, former § 12-1-10 (CRS 53) (now § 13-93-114) and former § 12-1-11 (CRS 53) (now this section). In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo.), aff'd sub nom. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir. 1958).

Former § 12-1-10 (CRS 53) (now § 13-93-114) and former § 12-1-11 (CRS 53) (now this section) did not separate the two classes of liens as clearly as might be desired. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir.), aff'g In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo. 1958).

The Colorado supreme court has declared that former § 12-1-10 (CRS 53) (now § 13-93-114) and former § 12-1-11 (CRS 53) (now this section) established two distinct classes of liens, each with its own limitation. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir.), aff'g In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo. 1958).

Where an attorney's right to a lien exists by virtue of a statute, such right cannot be extended beyond the fair intendment of such statute. In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo.), aff'd sub nom. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir. 1958).

There is no authority in Colorado for an equitable lien apart from former § 12-1-10 (CRS 53) (now § 13-93-114) and former § 12-1-11 (CRS 53) (now this section). In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo.), aff'd sub nom. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir. 1958).

This is in accord with the general rule that where a charging lien is created by statute, the right to the lien exists only in cases specifically provided for by such statute. In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo.), aff'd sub nom. Donaldson v. Gaudio 260 F.2d 333 (10th Cir. 1958).

Charging lien not created where money paid to attorney on behalf of debtor in settlement of a lawsuit against a third party remained in attorney's possession when compensable work had been completed. In re Oiltech, Inc., 38 B.R. 484 (Bankr. D. Nev. 1984).

The right to the special, particular, or charging lien rests, not on possession, but on the equity of an attorney to be paid his fees and disbursements out of the judgment obtained as a result of his service and skill. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir.), aff'g In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo. 1958).

This section intended to confer a right to a charging lien only when a claim becomes a "claim in suit". Donaldson v. Gaudio, 260 F.2d 333 (10th Cir.), aff'g In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo. 1958).

A "charging lien" could not attach for services in matters not involved in the suit. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir.), aff'g In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo. 1958).

A charging lien under this section can be waived. Thus, attorney waived lien by virtue of assurances made by the attorney's associate to third parties to whom papers belonged that the papers would be returned to the parties. It was irrelevant whether the papers belonged to the attorney's client or to third parties. People v. Brown, 840 P.2d 1085 (Colo. 1992).

A lien cannot be created by the mere fact that an attorney is entitled to be paid for his services, for to allow such a lien would be to give this creditor a preferred position which the law does not intend. In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo.), aff'd sub nom. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir. 1958).

Federal court has no jurisdiction to adjudicate amount of fees properly owing between an attorney and his clients with respect to matters unrelated to litigation before the court. Jenkins v. Weinshienk, 670 F.2d 915 (10th Cir. 1982).

Adjudication of existence of lien separate from adjudication of amount. Adjudicating the amount of fees owing between lawyer and client is not essential to determining the existence of an attorney's retaining lien. Jenkins v. Weinshienk, 670 F.2d 915 (10th Cir. 1982).

An attorney has no legal basis for the assertion of a lien simply to secure a fee obligation. People v. Razatos, 636 P.2d 666 (Colo. 1981).

To allow such a lien would be to give this attorney creditor a preferred position which the law does not intend. In re Forrest A. Heath Co., 159 F. Supp. 632 (D. Colo.), aff'd sub nom. Donaldson v. Gaudio, 260 F.2d 333 (10th Cir. 1958).

In order for an attorney to assert a retaining lien, the client must owe the attorney a general balance of compensation. People v. Garnett, 725 P.2d 1149 (Colo. 1986).

In deciding whether to enforce a retaining lien, a court should first determine the relationship between the party seeking the documents and the attorney and whether the party against whom the lien is asserted owes any fees to the attorney. Norton v. Ruebel, 2024 COA 108, 562 P.3d 96.

An attorney does not waive a retaining lien in its entirety by releasing a portion of the files covered by the lien to a client or a third party. Norton v. Ruebel, 2024 COA 108, 562 P.3d 96.

Validity and extent of attorney's lien in bankruptcy is determined by state law. In re Life Imaging Corp., 31 B.R. 101 (Bankr. D. Colo. 1983).

Lien not extinguished by bankruptcy. Under 11 U.S.C. § 101, an attorney's lien in Colorado is a "statutory" and not a "judicial" lien, which cannot be avoided by a bankruptcy debtor under 11 U.S.C. § 522(f). Ranes v. Molen, 31 B.R. 70 (Bankr. D. Colo. 1983).

An attorney's lien which is valid under state law is not extinguished when the client files bankruptcy. Further, there is no provision in the bankruptcy code for the voiding of a valid statutory attorney's lien. In re Life Imaging Corp., 31 B.R. 101 (Bankr. D. Colo. 1983).

Creditor's statutory attorney's lien obtained pursuant to former § 12-5-119 (now § 13-93-114) and former § 12-5-120 (now this section) was not merged into the judgment lien he subsequently obtained. In re Dickinson, 185 B.R. 840 (Bankr. D. Colo. 1995).

Attorney's interest in bankruptcy debtor's files. An attorney is entitled to adequate protection of interest in a bankruptcy debtor's files if it is required to turn them over to the debtor. A form of adequate protection is to require the debtor to make cash payments to the attorney to the extent that the use of the property results in a decrease in the value of the attorney's interest in the property. The decrease in value of the attorney's interest is that portion of unpaid attorney's fees attributable to the creation of the specific documents involved. In re Life Imaging Corp., 31 B.R. 101 (Bankr. D. Colo. 1983).

When substitute collateral is posted to replace books, records, and files which were the subject of an attorney's lien, the lien attaching to such collateral is of the same character as and is to be accorded no greater dignity than the lien on the original property. In re Oiltech, Inc., 38 B.R. 484 (Bankr. D. Nev. 1984).

In order to determine the amount of the attorney's lien, evidentiary hearing is required to determine the value to the debtor of the books, records, and files once held by the attorney. In re Oiltech, Inc., 38 B.R. 484 (Bankr. D. Nev 1984).

Lien attaches to client's papers once attorney has completed compensable work. People ex rel. MacFarlane v. Harthun, 195 Colo. 38, 581 P.2d 716 (1978).

Homestead exemption statute includes attorney's liens within its ambit and the attorney's lien does not attach to the homestead. If the debtor has any net equity remaining after the sale of the property in question, the creditor's attorney's lien attaches to that net equity and his claim is unsecured for any amount over that sum. In re Dickinson, 185 B.R. 840 (Bankr. D. Colo. 1995).

Lien continues during litigation over amount. The retaining lien exists if any fees are owed and apparently continues during litigation over the amount owing. Jenkins v. Weinshienk, 670 F.2d 915 (10th Cir. 1982).

Unconditional assurances that documents will be returned constitute an express waiver of lien. People v. Brown, 840 P.2d 1085 (Colo. 1992).

Priority of liens. Where notice of the attorney's lien was properly filed before the entry of judgment and before the state's assertion of a lien, the attorney's lien had priority. Matter of Estate of Benney, 771 P.2d 7 (Colo. App. 1988).

Enforceability of attorney's retaining lien against third parties, unlike a charging lien, is not conditioned upon the requirement of notice. In re Oiltech, Inc., 38 B.R. 484 (Bankr. D. Nev. 1984).

Attorney's lien begins to accrue from the moment of commencement of services and may then be enforced against any monies or property due and owing the attorney's client who receives judgment and is a lien on those items. In re Smith, 687 P.2d 519 (Colo. App. 1984).

Exception. In proceeding on counterclaim by attorney for recovery of attorney fees, trial court did not abuse discretion nor exceed jurisdiction by ordering production of files in attorney's possession relating to legal work done for client, even though files were subject to retaining lien. Jenkins v. District Court, 676 P.2d 1201 (Colo. 1984).

For discussion of exceptions to retaining lien, see Jenkins v. Weinshienk, 670 F.2d 915 (10th Cir. 1982).

Misconduct in other cases not to affect assertion of lien. Misconduct in a particular case, if suspension or disbarment is not involved, should not result in the loss of an attorney's ability to assert his lien in other cases where professional misconduct is not involved. People ex rel. MacFarlane v. Harthun, 195 Colo. 38, 581 P.2d 716 (1978).

Case involving misconduct affected. When an attorney is discharged or removed from a particular case for professional misconduct in the handling of his client's affairs, he has no right to assert a "retaining lien" as to that client's papers which are in his possession and must return those papers to that client upon request. People ex rel. MacFarlane v. Harthun, 195 Colo. 38, 581 P.2d 716 (1978).

Wrongful assertion of attorney's lien may constitute misconduct. Wrongfully asserting an attorney's lien under this section on stock certificates in the attorney's possession, where no "general balance of compensation" was owed, constitutes professional misconduct. People ex rel. Goldberg v. Gordon, 199 Colo. 296, 607 P.2d 995 (Colo. 1980).

Unfounded claim of lien violates professional code. The assertion of an attorney's lien in circumstances where the attorney has no statutory or legal foundation for a lien and, in fact, has an uncertain claim to the fee being claimed through the lien violates the code of professional responsibility. People v. Razatos, 636 P.2d 666 (Colo. 1981); People v. Smith, 830 P.2d 1003 (Colo. 1992); People v. Brown, 840 P.2d 1085, (Colo. 1992); People v. Mills, 861 P.2d 708 (Colo. 1993) (decided under DR 1-102 (A)(5)).

Even assuming that an attorney-client relationship had been created between attorney and client's wife for purposes of this section, section does not authorize an attorney to assert a retaining lien on a client's United States passport. There is nothing in this section that would permit an attorney to assert a possessory, or retaining, interest in a United States passport in order to assure payment for legal services. A passport is a sui generis type of federal property that does not fall within a client's "papers" on which a retaining lien may be asserted under this section. Matter of Attorney G., 2013 CO 27, 302 P.3d 248.

Applied in Holter v. Moore & Co., 702 F.2d 854 (10th Cir. 1983).

PART 2

LAW STUDENT PRACTICE