Estate of Benney, Matter of
| Decision Date | 16 April 1990 |
| Docket Number | No. 88SC619,88SC619 |
| Citation | 790 P.2d 319 |
| Parties | In the Matter of the Estate of Mary Elizabeth BENNEY, Deceased, The PEOPLE of the State of Colorado, Petitioner, v. Robert A. CARVELL and Gary S. Link, Respondents. |
| Court | Colorado Supreme Court |
Duane Woodard, Atty. Gen., Charles B. Howe, Chief Deputy Atty. Gen., Richard H. Forman, Sol. Gen., and Maurice G. Knaizer, First Asst. Atty. Gen., Denver, for petitioner.
Gary S. Link, Colorado Springs, pro se.
Robert Carvell, Colorado Springs, pro se.
The question in this case is whether the state's claim for recoupment of state funds for court-appointed attorney fees and investigative expenses paid on behalf of an indigent defendant in a criminal prosecution has priority over an attorney's lien for professional services rendered by the attorney on behalf of the same defendant in connection with the defendant's claim against the estate of his deceased wife. The court of appeals in In the Matter of the Estate of Benney, 771 P.2d 7 (Colo.App.1988), held that the attorney's lien was entitled to priority over the state's claim for recoupment. We reverse the judgment of the court of appeals and remand the case to that court with directions to return the case to the district court for further proceedings.
The relevant facts are not disputed. On or about February 8, 1984, Dan Benney (Benney) was charged in the District Court of El Paso County with first-degree murder of his wife, Elizabeth Benney, conspiracy to commit first degree murder, and a crime of violence. The district court, on February 17, 1984, appointed Gary Link to represent Benney pursuant to section 21-1-105, 8B C.R.S. (1986), which authorizes a court for cause to appoint an attorney other than the state public defender to represent an indigent person. Benney was subsequently convicted of the charges and on December 21, 1984, was sentenced to life imprisonment.
The record before us is quite sparse, and the only reference to attorney and investigation fees is the following notation in the judgment of conviction: "The amount of $1900.00 which has already been paid into the registry fund in this case is to be applied toward the attorney and investigative fees, and not to the costs listed herein." 1 On March 12, 1985, the district court issued an order authorizing the payment of $13,374.38 in state funds to Gary Link for legal services on behalf of Benney in the criminal prosecution. Benney's conviction was affirmed on appeal. People v. Benney, 757 P.2d 1078 (Colo.App.1987).
In a separate proceeding involving the probate of the estate of Elizabeth Benney, the personal representative filed a petition on February 5, 1985, for the final settlement and distribution of the estate. Two days later Gary Link and Robert Carvel (hereinafter referred to as "attorneys") filed an objection to the petition, and on March 12, 1985, filed in the probate case a claim on behalf of Benney for an equitable lien against the estate based on contributions which Benney allegedly made toward the purchase of the family residence. 2 On December 5, 1985, prior to the court's resolution of Benney's claim, the attorneys filed a notice of an attorney's lien "against any and all monies they have or might obtain, through their assistance, on behalf of Dan H. Benney" in the probate case. The following day, December 6, 1985, the district court granted Benney's claim for $13,425, plus interest, but expressly ordered that the personal representative deposit the amount of Benney's claim into the registry of court and that the money be held in the registry "until such time as any claims the State of Colorado may have against such monies are resolved." 3
In early January 1986, the attorneys filed a motion to reduce the lien to judgment. However, before the court acted on the motion, the state controller, on January 27, 1986, filed a claim for recoupment from Benney of the $13,374.38 which the state paid to Gary Link for attorney fees and the $2,998.75 paid by the state for investigative expenses in connection with the murder prosecution. At a hearing on the state's claim the attorneys testified that they had provided legal services on Benney's behalf in the probate case and in several other matters as well. There was no evidence, however, establishing the amount and value of the legal services provided to Benney in the probate case. The district court ruled that the state's claim for recoupment of monies paid for attorney fees and investigative expenses was superior to the attorney's lien filed in the probate action and ordered that the $13,425, plus interest, previously deposited by the personal representative into the registry be turned over to the general fund of the state toward payment of its claim of $16,373.13.
The attorneys appealed to the court of appeals, which reversed the judgment of the district court. The court of appeals held that since the attorney's lien had been filed in the probate case the day before the district court's award to Benney on his claim against his deceased wife's estate, and since the state's claim for recoupment was not filed until approximately six weeks thereafter, the attorney's lien had priority over the state's claim. Estate of Benney, 771 P.2d at 8. In the court of appeals' view, when the district court ordered that the probate award to Benney be held in abeyance until resolution of the state's claim for recoupment, the probate award to Benney, "as a matter of law, was already burdened with the attorney's lien for attorney fees." Id. at 8-9. We granted the state's petition for certiorari to review the court of appeals' resolution of the issue of priority between the attorney's lien for professional services rendered in obtaining a judgment on behalf of a client and the state's claim for recoupment of attorney fees and investigative expenses paid on behalf of a defendant in a criminal prosecution.
Our analysis of this case must proceed from an examination, on the one hand, of the scope and effect of the statutory scheme creating an attorney's lien and, on the other, the statutory scheme for recoupment of attorney fees and other expenses paid on behalf of a defendant in connection with a criminal prosecution.
There are two types of attorney's liens in Colorado, both created by statute: the "retaining lien" and the "charging lien." E.g., Donaldson v. Gaudio, 260 F.2d 333 (10th Cir.1958); Collins v. Thuringer, 92 Colo. 433, 21 P.2d 709 (1933); In re Marriage of Rosenberg, 690 P.2d 1293 (Colo.App.1984). Section 12-5-120, 5 C.R.S. (1985), provides an attorney with a retaining or possessory lien "for the general balance of compensation upon any papers of [the] client which have come into [the attorney's] possession" and upon any money due the 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." The retaining lien thus gives the attorney the right to retain the client's papers until the general balance due for legal services is paid to the attorney, "whether such services grew out of the special matters then in [the attorney's] hands, or other legal matters." Collins, 92 Colo. at 437, 21 P.2d at 710.
The charging lien is created by section 12-5-119, 5 C.R.S. (1985), and grants an attorney a lien on claims or choses in action (such as, for example, the client's claim against another for money due on a contract or on an unpaid promissory note payable to the client), on any judgment that the attorney obtained or assisted in obtaining in favor of the client, and on any legal claim filed by the attorney for fees due from the client. 4 The purpose of the charging lien is to satisfy the attorney's equitable claim for services rendered to the client. See Fillmore v. Wells, 10 Colo. 228, 236-37, 15 P. 343, 347 (1887). 5 Section 12-5-119 states that the attorney may file with the clerk of the court wherein an action is pending a "notice of lien" setting forth the attorney's agreement of compensation with his client and that such notice, when duly entered of record, shall constitute a notice to all persons and parties, including any judgment creditor of the client, of the attorney's first lien on any judgment entered in favor of a client. The statutory text of section 12-5-119 indicates that in cases where an attorney files a claim against the client to collect a fee for services rendered, the charging lien attaches at the commencement of the suit. The statutory text also provides for a charging lien when the client's money, property, claim or chose in action comes into the hands of the attorney rendering legal services to the client. See generally, Dankwardt v. Kermode, 68 Colo. 225, 187 P. 519 (1920).
As pertinent to the instant case, which involves a probate award in favor of the client, section 12-5-119 provides that the charging lien attaches at the entry of judgment, and our prior decisions have so held. MacFarlane v. Harthun, 195 Colo. 38, 41-42, 581 P.2d 716, 718 (1978); Johnson v. McMillan, 13 Colo. 423, 426, 22 P. 769, 770 (1889). In contrast to the retaining lien, which secures the payment of attorney fees for all legal matters on which services have been rendered, the charging lien is limited to securing the payment of the reasonable value of attorney fees in the particular matter then being handled by the attorney. See generally Collins, 92 Colo. at 438, 21 P.2d at 711. Where the attorney obtains or assists in obtaining a judgment in favor of the client, therefore, the charging lien extends only to attorney fees for those professional services rendered in obtaining the judgment and not for unrelated services. Id.; see also Duncan v. Stickney Co., 97 Colo. 9, 46 P.2d 750 (1935).
The state public defender is charged with the responsibility of representing indigent defendants in criminal prosecutions, but a court "for...
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