Opinion
2:08-CV-1293 JCM (GWF).
December 2, 2010
ORDER
Presently before the court is defendants Bina Shah's, Raj Shah's, and Spektrum Entertainment, Inc.'s former attorney Duane Frizell's motion to adjudicate attorney's lien and reduce attorney's lien to judgment. (Doc. #171). Responses were due by August 27, 2010. To date, no party has filed any document related to the motion.
On November 13, 2010, movant Frizell made his first appearance in this court on behalf of the defendants. (Doc. #57). Thereafter, on November 25, 2010, the court granted defendants' counsel of record, Theodore Parker III's, motion to withdraw as attorney. Movant Frizell continued to represent the defendants through April 15, 2010, when this court ultimately granted Frizell's motion to withdraw as attorney of record (doc. #112). (Doc. #131).
Frizell now comes before the court stating that defendants are past due on invoices for professional services rendered in the instant action. On August 9, 2010, movant served a notice of lien for attorney's fees (doc. #147) in the amount of $28,988.94 upon defendants by express mail. Movant alleges that, despite these efforts, defendants still refuse to pay for legal services rendered on their behalf. Accordingly, Mr. Frizell has filed the instant motion.
I. JURISDICTION
This court has subject matter jurisdiction over the instant case pursuant to 28 U.S.C. § 1332, because the parties are of diverse citizenship and the amount in controversy exceeds $75,000. (Doc. #1, compl. ¶ 1). The court also has supplemental jurisdiction over "all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy. . . ." 28 U.S.C. § 1367(a). Here, the court finds that the instant motion is so related to the action at hand such that the exercise of supplemental jurisdiction would be proper.
II. ATTORNEY'S LIEN
Nevada recognizes two kinds of attorney's liens: (1) a special "charging lien" created by statute, which attaches to the judgment or settlement that the attorney obtained for the client, see NRS 18.015; and (2) a common law "retaining lien," which allows a discharged attorney to withhold the client's file and other property until the court, at the request or consent of the client, adjudicates the client's rights and obligations with respect to the lien, Argentena Consol. Min. Co. v. Jolley Urga Wirth Woodbury Standish, 216 P.3d 779, 784 (Nev. 2009). Each is discussed below in the context of this motion.
A. Charging Lien
Although the movant characterizes his motion as arising under NRS 18.015, he has no basis for asserting a charging lien, as the defendants' answers and counterclaims were stricken. As defendants will obtain no affirmative recovery in the underlying action, Frizell, as their former attorney, will be unable to retain a charging lien on the underlying action.
B. Retaining Lien
Inasmuch as the instant motion requests adjudication of a retaining lien, the court is unable to provide relief. The Nevada Supreme Court has held that "a retaining lien is a passive lien that cannot be actively enforced by the attorney in judicial proceedings." Id. (citing Figliuzzi v. District Court, 890 P.2d 798, 801 (Nev. 1995)). Rather, the client determines whether it wants to extinguish the lien by requesting that the court compel delivery of the client's files in return for providing adequate security. Id. Until this time, "the attorney may keep possession of the former client's files[,] and the attorney's recourse is to file a separate action to recover for the services expended on behalf of the former client." Id.
Here, the clients-defendants have neither requested nor consented to the district court's adjudication of a retaining lien. Furthermore, the Nevada Supreme Court has rejected Gordon v. Stewart, 324 P.2d 234 (Nev. 1958), cited by the movant, to the extent that it held that the district court has "the power to resolve a fee dispute in the underlying action irrespective of whether the attorney sought adjudication of a lien." Argentena, 216 P.3d at 786.
Rather, the Nevada Supreme Court has held that in a situation like this where an attorney does not have an enforceable charging lien, and where a client does not move the court to resolve the retaining lien, "the proper method by which the attorney should seek adjudication of the fee dispute is an action against his or her former client in a separate proceeding." Id. at 787 (emphasis added). We find this precedent controlling under the facts of this case, and decline to adjudicate the motion.
The court notes that the holding in Argentena, where the court declined to adjudicate the fee dispute, was based in part on the fact that the client in that case had also asserted a legal malpractice claim against the fee-seeking attorney. While that factor is not present here, the court concludes that its absence is not dispositive. In Argentena, the court first stated that "absent an enforceable charging lien or the client's request or consent to the district court's adjudication, the district court is without jurisdiction to adjudicate an attorney-client fee dispute in the underlying action." 216 P.3d at 781. Only then did the court go on to list the malpractice action as an aggravating factor specific to that case, stating it is "particularly inappropriate to summarily adjudicate a fee dispute" in that scenario. Id.
C. Fee Dispute as Incidental to the Underlying Action
To the extent that movant requests the court adjudicate the fee dispute outside of the above described lien context, the motion is also denied. The Nevada Supreme Court in Argentena rejected this approach: "[t]o the extent that the Sarman court held that a court has `incidental jurisdiction' to resolve an attorney-client fee dispute regardless of whether a valid lien existed, we conclude that the Sarman opinion is overbroad." 216 P.3d at 785.
The Argentena court also rejected a similar holding in the Gordon opinion cited by the movant: "[i]n reviewing the Gordon opinion, however, like the Sarman court, the Gordon court conflated statements made in Earl v. Las Vegas Auto Parts[, 307 P.2d 781 (Nev. 1957)] . . . and improperly extended the Earl court's holding." Id. at 785-86. Rather, it is only in the charging lien context that a court has incidental jurisdiction to resolve a fee dispute. Id. at 786.
Here, as in Gordon, which the Argentena court overruled, there is no charging lien, and the attorney voluntarily withdrew as counsel of record ( see doc. #112). Furthermore, the clients-defendants have not consented to or requested the court's adjudication of a retaining lien. Thus, this court is without jurisdiction to adjudicate the instant motion.
Accordingly,
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that movant Duane Frizell's motion to adjudicate attorney's lien and reduce attorney's lien to judgement (doc. # 171) is DENIED.
DATED this 2nd day of December, 2010.