Cappa v. F & K Rock & Sand, Inc.

• Decision Date: 27 July 1988
• Docket Number: No. F008163,F008163
• Citation: 249 Cal.Rptr. 718,203 Cal.App.3d 172
• Parties: Steven Andrew CAPPA, Plaintiff and Respondent, v. F & K ROCK & SAND, INC. et al., Defendants; County of Fresno, State of Washington ex rel. Claudia K. Stasinas, Claimant and Appellant.
• Court: California Court of Appeals Court of Appeals

Page 718

249 Cal.Rptr. 718

203 Cal.App.3d 172

Steven Andrew CAPPA, Plaintiff and Respondent, v. F & K ROCK & SAND, INC. et al., Defendants County of Fresno, State of Washington ex rel. Claudia K. Stasinas, Claimant and Appellant.

No. F008163.

Court of Appeal, Fifth District, California.

July 27, 1988.

[203 Cal.App.3d 173] John K. Van de Kamp, Atty. Gen., Steve White, Chief Asst. Atty. Gen., J. Robert Jibson and William G. Prahl, Deputy Attys. Gen., Sacramento, for claimant and appellant.

Paul S. Mosesian, Fresno, for plaintiff and respondent.

No appearance for defendants.

OPINION

STONE (Wm. A.), Associate Justice.

On November 9, 1983, the County of Fresno (County) recovered judgment in the Superior Court in an unrelated action against Stephen Andrew Cape (aka Cappa) for child support arrearages in the amount of $10,398. The County was acting on behalf of the State of Washington to recover monies disbursed by Washington for the support of Cappa's child.

Cappa entered into a contingency fee agreement on April 9, 1985, with Paul Mosesian, an attorney, whereby Mosesian agreed to represent Cappa in the instant action for personal injuries. Out of his gross recovery Cappa agreed to pay 33 1/3 percent for attorney's fees and to reimburse Mosesian for costs advanced to prosecute the action. The agreement provided that Mosesian would be granted a lien on the gross recovery for fees and costs. ¹ On July 25, 1986, the County filed a notice of lien pursuant to Code of Civil Procedure section 708.410 ² seeking to place a lien in the amount of $8,123 on any award of damages that Cappa might receive for his injuries. On August 1, 1986, the jury returned a verdict in favor of Cappa for $5,000, and a week later Mosesian filed a memorandum of costs and disbursements seeking to tax costs in the amount of $4,229.26. On November 12, 1986, the County refiled its notice of lien.

On November 19, 1986, defendants F and K Rock and Sand, Inc., and Rodney James Burns, filed a motion pursuant to Code of Civil Procedure section 708.470 for an order directing satisfaction of the lien filed by the County out of the damages awarded to Cappa. Mosesian opposed the motion on the basis that, pursuant to Civil Code section 2897, his lien for attorney's fees and costs had priority over the judgment creditor's lien for child support arrearages since his contractual lien was created prior to the judgment creditor's lien. The trial court concluded the lien for attorney's fees and costs had priority and ordered that Mosesian's lien was to be satisfied before the subsequent lien for child support arrearages. The County, as intervenor, appeals that order.

The sole issue before us is whether the lien for child support arrearages based upon a judgment in favor of the County has priority over the previously created lien for attorney's fees and costs. We will conclude that it does not.

A judgment creditor who has a money judgment against a judgment debtor who is a party to a pending action may obtain a lien on the judgment debtor's cause of action to satisfy the judgment creditor's money judgment by filing a notice of lien in the pending action. (Code Civ.Proc., § 708.410.) A lien for attorney's fees and costs in favor of an attorney upon the proceeds of a prospective judgment in favor of the client may be created by contract without the necessity of complying with Code of Civil Procedure section 708.410. (Cetenko v. United California Bank (1982) 30 Cal.3d 528, 531, 179 Cal.Rptr. 902, 638 P.2d 1299.) ³ It becomes effective upon the execution of the contract. ( Id. at p. 534, 179 Cal.Rptr. 902, 638 P.2d 1299; Haupt v. Charlie's Kosher Market (1941) 17 Cal.2d 843, 845, 112 P.2d 627.) Accordingly, in the case before us, the attorney's lien became effective April 9, 1985.

In the event more than one lien is filed in the same cause of action, Civil Code section 2897 provides priority according to the time of creation, assuming other considerations are equal. ⁴ Thus, in Cetenko v. United California Bank, supra, 30 Cal.3d 528, 179 Cal.Rptr. 902, 638 P.2d 1299, it was held that a contractual lien for attorney's fees and costs entered into prior to initiating a legal action has priority over a judgment creditor's lien created pursuant to Code of Civil Procedure section 708.410. (Id. at pp. 534-536, 179 Cal.Rptr. 902, 638 P.2d 1299.)

The County contends that the general rule set forth in Civil Code section 2897 and Cetenko establishing priority by time of creation should not be applied in the present case because "all things are not equal." The County's argument is two-fold. First, overwhelming public policy considerations favor satisfaction of child support obligations over a contract for attorney's fees and costs. Second, since a lien for attorney's fees and costs is almost always created before an action is filed and a judgment creditor's lien can only be created by filing notice once the action is pending, an attorney's lien is always first in time. According to the County, such preferential treatment gives Mr. Cappa's attorney an unfair advantage over Mr. Cappa's child. The County asks this court to create an exception to the "first in time, first in right" rule set forth in Civil Code section 2897 for a judgment creditor's lien for child support arrearages.

The County's public policy argument is not persuasive when applied to the present set of facts, since it is not Mr. Cappa's child, but the State of Washington through the County which seeks to hold Mr. Cappa responsible for the payment of child support arrearages. Washington has already...