In re Alfaro, CASE NO. 2011 -35116-BKC-AJC
| Decision Date | 13 April 2012 |
| Docket Number | CASE NO. 2011 -35116-BKC-AJC |
| Parties | In re: MILKA Y. ALFARO, Debtor. |
| Court | U.S. Bankruptcy Court — Southern District of Florida |
ORDERED in the Southern District of Florida on April 13, 2012.
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THIS CAUSE came to be heard on March 20, 2012 at 9:00 a.m., upon Debtor's Motion for Turnover of Files Relevant to Pending Dissolution of Marriage Action and upon Debtor's Motion to Value, Determine Secured Status of Lien and Avoid Lien on Personal Property. The Court having heard argument of counsel, the Debtor's Motionfor Turnover is DENIED and Debtor's Motion to Value is GRANTED in part and DENIED in part as set forth herein.
Movant Laline Concepcion-Veloso, P.A. asserts a valid retaining lien for attorney's fees and costs upon the Debtor's documents and files that came into her possession in the course of her professional representation of the Debtor in the Debtor's divorce action. Laline Concepcion-Veloso, P.A. contends her secured lien is not invalidated by the Debtor's bankruptcy case. The value of the lien is $14,970.83, which is the outstanding amount for services rendered by Laline Concepcion-Veloso, P.A. to the Debtor in connection with the divorce action.
Debtor filed a dissolution of marriage action, Milka Alfaro v. Ariel Alfaro, Case No. 2007-28474 FC 26, on October 26, 2007, which is currently pending in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida. On September 8, 2011, Debtor, MILKA Y. ALFARO, filed for Chapter 13 protection. Debtor admits that she filed for Chapter 13 protection to stay her pending divorce action. See Debtor's Motion for Turnover of Files Relevant to Pending Dissolution of Marriage Action, at paragraph 1.
Subsequent to filing her Chapter 13 petition, Debtor discharged Laline Concepcion-Veloso, Esq., in her divorce action and retained Roger J. Schindler, Esq. Thereafter, on January 27, 2012, Debtor filed an Amended Summary of Schedules, wherein she included Laline Concepcion-Veloso, P.A. as a creditor for the first time. The Debtor does not dispute the amount of the debt owing to Laline Concepcion-Veloso, P.A. on her Amended Schedules.
On February 17, 2012, Laline Concepcion-Veloso, P.A. timely filed its Proof of Claim. The Court has reviewed the claim for fees and the state court docket of the pending divorce action and believes the amount charged for the apparently necessary time-consuming services provided over lengthy court proceedings is fair and reasonable. Thus, upon consideration, the Court believes Laline Concepcion-Veloso, P.A. is not required to turn over documents and files to the Debtor until the Debtor either pays the outstanding attorney's fees and costs in the amount of $14,970.83 for services rendered in connection with the divorce action or provides adequate security.
The validity and extent of retaining liens in bankruptcy is determined by state law. See In re Life Imaging Corp., 31 B.R. 101 (Bankr. Colo. 1983). Attorneys' retaining liens are permitted under Florida law. See Daniel Moves, P.A. v. Smith, 486 So.2d 559 (Fla. 1986). In Florida, retaining liens are available to an attorney to secure the payment of fees, and a retaining lien attaches to all property, papers, books, documents, securities, and moneys of the client coming into the hands of the attorney in the course of his professional employment. See Cooper v. McNair, 49 F.2d 778, 781 (S.D.Fla. 1931). Florida law establishes that the value of a retaining lien rests entirely upon the attorney's right to retain possession of the file until the bill is paid. See Rathburn v. Policastro, 703 So. 2d 537 (Fla. 4th DCA 1997). Further, a valid retaining lien is not extinguished by the client's filing of a bankruptcy case. See Life Imaging Corp., 31 B.R. at 101 (citing Brannon v. Gay (Matter of Browy), 527 F.2d 799 (7th Cir. 1976). The lien is subject to the provisions of 11 U.S.C. §542.
During the course of Laline Concepcion-Veloso P.A.'s representation of the Debtor in the divorce action, the undersigned came into possession of documents andfiles. Debtor has failed to establish entitlement to these documents and files without compensation therefor and Debtor has failed to establish any basis to support her argument that the value of Laline Concepcion-Veloso, P.A.'s retaining lien is $0.00.
The value of the Debtor's documents and files that are the subject of the valid retaining lien is the full amount of the fees and costs that are due and owing, as same are decidedly reasonable and necessary. The retaining lien covers the full balance for all the legal work performed for the benefit of the Debtor in the divorce case. The inconvenience to...
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