Hoover-Reynolds v. Superior Court

• Decision Date: 18 November 1996
• Docket Number: No. D026011,P,HOOVER-REYNOLD,D026011
• Citation: 50 Cal.App.4th 1273,58 Cal.Rptr.2d 173
• Parties: , 96 Cal. Daily Op. Serv. 8315, 96 Daily Journal D.A.R. 13,820 Stacieetitioner, v. The SUPERIOR COURT of San Diego County, Respondent; COUNTY OF SAN DIEGO, Real Party in Interest.
• Court: California Court of Appeals Court of Appeals

Page 173

58 Cal.Rptr.2d 173

50 Cal.App.4th 1273, 96 Cal. Daily Op. Serv. 8315,

96 Daily Journal D.A.R. 13,820

Stacie HOOVER-REYNOLDS, Petitioner, v. The SUPERIOR COURT of San Diego County, Respondent;

COUNTY OF SAN DIEGO, Real Party in Interest.

No. D026011.

Court of Appeal, Fourth District, Division 1, California.

Nov. 18, 1996.

Purviance & Purviance, Farris C. Purviance III and Lorraine M. Purviance, El Cajon, for Petitioner.

No appearance by Respondent.

Paul J. Pfingst, District Attorney, Thomas F. McArdle and Stephen E. Carr, Deputy District Attorneys, for Real Party in Interest.

McDONALD, Associate Justice.

In this action two parties made competing claims to certain moneys collected from the former husband of petitioner Stacie Hoover-Reynolds (petitioner). The moneys are past due child support payments owed by the former husband to petitioner. The first claimants, attorneys Purviance & Purviance (Attorneys), assert they are entitled to priority because petitioner had granted Attorneys a "charging lien" to secure payment of the fees petitioner owed Attorneys. The second claimant, the County of San Diego (County) through its district attorney, asserts it is entitled to the moneys based on an assignment by petitioner pursuant to WELFARE AND INSTITUTIONS CODE SECTION 11477¹ to County of petitioner's rights to past due spousal and child support owed by petitioner's former husband.

The issue is whether Attorneys' lien claim has priority over County's claim. The trial court found County was entitled to the moneys and ordered them disbursed to County. We conclude that an attorney's "charging lien" does not attach to funds paid for child support obligations and therefore the trial court's order was correct and we deny the writ petition.

I. Factual and Procedural Background

A. The Genesis of the Fund

In 1994 petitioner filed for dissolution of her marriage to Michael S. Reynolds (husband). On January 16, 1995, petitioner signed a retainer agreement retaining the legal services of Attorneys. The retainer agreement contains the provision on which Attorneys rely for asserting they have a charging lien on any moneys awarded petitioner in the dissolution action. ²

On February 23, 1995, the court ordered husband to pay petitioner $800 per month as family support. However, on October 4, 1995, the court modified its order effective October 1, 1995, to provide that husband pay petitioner $1,626 per month as child support. The court did not set any amount as spousal support and did not set the amount of arrearages as of that date.

In December 1995, petitioner sought a writ of execution to levy on husband's bank accounts. Petitioner claimed husband owed more than $6,500 in unpaid child support. The court issued the requested writ and ordered that all amounts collected through enforcement of the writ be forwarded to County. The San Diego County Marshal levied the writ of execution and collected more than $4,600 (the fund).

B. The Competing Claims to the Fund

Attorneys base their claim to the fund on the Attorneys' "charging lien" granted by the retainer agreement dated January 16, 1995. It is undisputed that the contractual predicate to the lien--unpaid attorneys' fees--is present here.

County bases its claim on the assignment dated August 10, 1995, executed by petitioner when she applied for and received "Aid to Families With Dependent Children" (AFDC). ³ Section 11477, subdivision (a) specifies that, as a condition of eligibility for AFDC, the applicant must assign to the county any rights to support owed the applicant or any other family member for whom the applicant is applying for aid. Section 11457 provides that when an assignment has been made pursuant to section 11477 any moneys owed by a noncustodial parent for child support shall be paid directly to the district attorney or his designee. Here County through its district attorney is the real party in interest, to which petitioner made the assignment.

C. The Trial Court's Ruling

The San Diego County Marshal released the fund to Attorneys. Attorneys deposited the fund in their trust account and filed a motion seeking a declaration that they were entitled to the fund because their charging lien predated petitioner's assignment to County. County opposed the motion, arguing the Attorneys' lien could not attach to the fund because petitioner's section 11477 assignment divested petitioner of any interest in the child support payments and therefore petitioner had no rights to the fund against which Attorneys' lien could attach.

The trial court denied Attorneys' motion and ordered the funds released to County.

II. The Trial Court Correctly Denied Attorneys' Motion Because Public Policy Precludes an Attorney From Impressing a Charging Lien on Child Support Payments

Attorneys argue that under Cappa v. F & K Rock & Sand, Inc. (1988) 203 Cal.App.3d 172, 249 Cal.Rptr. 718 a preexisting attorney's charging lien is entitled to priority over the lien of a subsequent judgment creditor even when the judgment creditor's claim seeks reimbursement for county-paid child support. The trial court rejected the argument, concluding Cappa did not apply because a charging lien can attach only when petitioner has rights to the funds, and petitioner's section 11477 assignment divested petitioner of any interest in the funds collected from husband. The trial court therefore denied Attorneys' motion and ordered the funds released to County.

We agree with the trial court's order for reasons different from those stated by the trial court. (E.L. White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 511, 146 Cal.Rptr. 614, 579 P.2d 505 [appellate court will affirm a correct order whether or not ground on which trial court relied was correct].) We conclude that an attorney cannot impress a charging lien on funds owed the client by a third party to the extent those funds are payments of the third party's obligations for child support. Because Attorneys' lien here could not attach to the fund, Attorneys have no lien on the fund and petitioner's assignment to County was properly upheld by the trial court.

In California an attorney may ordinarily obtain a contractual charging lien for fees enforceable against the recovery obtained in the lawsuit the attorney prosecuted for his client. (Haupt v. Charlie's Kosher Market (1941) 17 Cal.2d 843, 844, 112 P.2d 627.) When the charging lien is created before the lien of a judgment creditor attaches to the recovery, the courts have held the charging lien has priority pursuant to the mandate of Civil Code section 2897 that "[o]ther things being equal, different liens upon the same property have priority according to the time of their creation." (See, e.g., Cetenko v. United California Bank (1982) 30 Cal.3d 528, 534-536, 179 Cal.Rptr. 902, 638 P.2d 1299.)

However, we deal here with the special situation of whether a charging lien may attach to the recovery obtained by the attorney when that recovery is for child support. The parties have not cited, and this court has not found, any California authority on this question. ⁴ However, it appears the majority of states which have considered this question have concluded an attorney's lien does not attach when the proceeds are payments of court-ordered child support. (See, e.g., Fuqua v. Fuqua (1977) 88 Wash.2d 100, 558 P.2d 801, 804 [stating "majority" view is that charging lien against child support is invalid].)

Most courts which have adopted the majority rule have done so on the public policy grounds that an award of child support is to enable the child adequately to be supported and that it would frustrate the purpose of the award if an attorney could assert a lien to obtain portions of the amount needed for that support. ⁵ (See Fuqua v. Fuqua, supra, 558 P.2d at pp. 805-806.) The Fuqua court explained:

"[T]o allow an attorney's lien to be asserted against child support would necessarily result in counsel for the custodian taking from the children involved, monies which the court has determined to be necessary to assure their adequate support. It is impractical to assume that the trial court can consider possible liability for attorney's fees in ascertaining a support figure. This is precisely the sort of consideration which led to our holding in [In re Smith (1953) 42 Wash.2d 188 254 P.2d 464]. If the assertion of liens such as these became commonplace, the court's function in providing for the adequate support of minor children, the innocent parties to these actions, would be wholly frustrated. 'Equity, which creates the fund, will not suffer its purpose to be nullified.' [Turner v. Woolworth (1917) 221 N.Y. 425, 430, 117 N.E. 814, 816.] We therefore hold that, as a matter of public policy, [attorney's charging liens] may not be asserted against monies which represent payments for child support. Any effort to assert such a lien is void, whether it be against funds in the hands of the clerk, the lawful custodian of the children, or an attorney." (Fuqua, supra, 558 P.2d at p. 805.)

Attempts by attorneys to enforce charging liens against support awards have been rejected for similar reasons by the courts in Florida (see Dyer v. Dyer (Fla.App.1983) 438 So.2d 954, 955 [no lien on alimony] ); Ohio (see Minor Child of Zentack v. Strong (1992) 83 Ohio App.3d 332, 614 N.E.2d 1106, 1109 [no lien on child support] ); Missouri (see Hilleary v. Hilleary (1915) 189 Mo.App. 704, 175 S.W. 282 [no lien on alimony] and Sanner v. Sanner (Mo.App.1932) 46 S.W.2d 936, 937-938 [no lien on alimony or child support] ); New York (see In re Bolles (1903) 78 A.D. 180, 79 N.Y.S. 530 [no lien on alimony], Dougherty v. Burger (1929) 133 Misc. 807, 234 N.Y.S. 274 [same], and Mooney v. Mooney (1899) 29 Misc. 707, 62 N.Y.S. 769 [same] ); and Michigan (see Jordan v. Westerman (1886) 62 Mich. 170, 178-180, 28 N.W. 826, 829-830 [no lien on alimony] ).

Although an attorney's charging lien may attach and have...