Marsh, Day & Calhoun v. Solomon

• Citation: 529 A.2d 702,204 Conn. 639
• Decision Date: 04 August 1987
• Docket Number: No. 13083,13083
• Court: Connecticut Supreme Court
• Parties: MARSH, DAY & CALHOUN v. Elisabeth SOLOMON.

Page 702

529 A.2d 702

204 Conn. 639

MARSH, DAY & CALHOUN v. Elisabeth SOLOMON.

No. 13083.

Supreme Court of Connecticut.

Argued May 13, 1987.

Decided Aug. 4, 1987.

John Lino Ponzini, Stamford, for appellant-appellee (defendant).

Abraham I. Gordon, with whom, on brief, were Richard S. Scalo and Ronald D. Japha, Bridgeport, for appellee-appellant (plaintiff).

Before PETERS, C.J., and HEALEY, SHEA, CALLAHAN and LAVERY, JJ.

ARTHUR H. HEALEY, Associate Justice.

The plaintiff, Marsh, Day & Calhoun, brought this action against the defendant, Elisabeth Solomon, to recover legal fees for services rendered to her. The defendant filed a counterclaim alleging that, upon the termination of their attorney-client relationship, the plaintiff had wrongfully refused, despite demand, to return her files. In her counterclaim, the defendant sought damages and an order directing the plaintiff to return the files. During the trial to the jury, the trial court ruled that it would itself decide that part of the counterclaim which sought an order directing the plaintiff to turn over to the defendant the files it had retained. The trial court then ordered the defendant to file an amended counterclaim reflecting its ruling. ¹ On January 23, 1986, the jury returned a verdict for the plaintiff on the complaint in the amount of $60,047.42, plus interest, and also a verdict for the plaintiff on the amended counterclaim. On the same day, the trial court filed its memorandum of decision on the matter it had heard as a court. In that memorandum, the trial court denied the defendant's request for an order directing the plaintiff to return the files. After the trial court denied the defendant's motions to set aside the verdict and for judgment notwithstanding the verdict, the defendant filed an appeal and the plaintiff filed a cross appeal in the Appellate Court. Pursuant to Practice Book § 4023, this court transferred the appeal and the cross appeal to itself.

The following background facts are undisputed. The plaintiff rendered legal services as attorneys at law to the defendant between October 3, 1983, and October 10, 1984. A dispute arose between the parties and the relationship ended on October 10, 1984. Despite demand by the plaintiff, the defendant failed to pay the claimed balance of $60,047.42, plus interest. On November 15, 1984, the plaintiff brought this action and obtained a prejudgment remedy of attachment on property owned by the defendant in Westport. Throughout the trial and appeal, the plaintiff has retained possession of the defendant's files under a claim of an attorney's lien.

On appeal, the defendant asks that the files in the plaintiff's possession be turned over to her and seeks a new trial on the issue of the damages resulting from the allegedly wrongful retention of her files. ² On the cross appeal, the plaintiff alleges error in the exclusion of evidence concerning the litigation costs which it incurred in the trial below and in the trial court's failure to charge the jury as to those costs. We find no error on the appeal or the cross appeal.

I

In her appeal, the defendant contends that: (1) Connecticut does not recognize a self-executing attorney's retaining lien; (2) even if an attorney's retaining lien has been recognized in the past, it should be void for public policy reasons; and (3) by securing an attachment of the defendant's property, the plaintiff waived any right to a retaining lien.

A

The main issue on this appeal is whether Connecticut recognizes a common law, self-executing attorney's retaining lien. An attorney's retaining lien is a possessory lien on a client's papers and files that the attorney holds until his fee has been paid. 7 Am.Jur.2d, Attorneys at Law § 315; 7A C.J.S., Attorney and Client §§ 357, 358; comment, "Attorney's Liens: A Practical Overview," 6 U.Brpt.L.Rev. 77, 80 (1985). A retaining lien differs from a charging lien, which is a lien placed upon any money recovery or fund due the client at the conclusion of suit. 7 Am.Jur.2d, supra, § 324. A retaining lien is a passive lien and the attorney is unable to enforce it at law or in equity. Hagearty v. Burns, 4 Conn.Sup. 505, aff'd sub nom. Hagearty v. Ryan, 123 Conn. 372, 195 A. 730 (1937); Midvale Motors, Inc. v. Saunders, 21 Utah 2d 181, 184, 442 P.2d 938 (1968); Mahomet v. Hartford Ins. Co., 3 Wash.App. 560, 567, 477 P.2d 191 (1970). A retaining lien affords only the right to retain possession until all proper charges are paid. There is no right of sale and the retaining lien's principal value is the leverage that the lien gives to the attorney over a client who refuses to pay for services rendered. Brauer v. Hotel Associates, Inc., 40 N.J. 415, 422, 192 A.2d 831 (1963).

At common law, the existence of a retaining lien is unquestioned in both English and American courts. Pomerantz v. Schandler, 704 F.2d 681 (2d Cir.1983); The Flush, 277 F. 25, 29 (2d Cir.1921), cert. denied, sub nom. Bulk Oil Transports v. Thompson, 257 U.S. 657, 42 S.Ct. 184, 66 L.Ed. 421 (1922). It was recognized in England as early as 1734. Ex Parte Bush, 7 Viner's Abr. 74, 22 Eng.Rep. 93 (Ch.1734); see In re Morris, 1 K.B. 473 (1907). In McPherson v. Cox, 96 U.S. (6 Otto) 404, 417, 24 L.Ed. 746 (1877), the United States Supreme Court pointed out that an attorney has a lien by law, apart from any express agreement, on the retained papers of his or her clients for all unpaid attorney's fees. Federal courts of appeal have recognized the attorney's retaining lien; Pomerantz v. Schandler, supra; The Flush, supra; Everett, Clarke & Benedict v. Alpha Portland Cement Co., 225 F. 931, 935-37 (2d Cir.1915); as have most state courts. Annot., 3 A.L.R.2d 148, 150 (1949); see, e.g., Attorney Grievance Commission of Maryland v. McIntire, 286 Md. 87, 96, 405 A.2d 273 (1979); Levitas v. Levitas, 96 Misc.2d 929, 931, 410 N.Y.S.2d 41 (1978); Silverstein v. Hornick, 376 Pa. 536, 541, 103 A.2d 734 (1954); but see Academy of California Optometrists, Inc. v. Superior Court, 51 Cal.App.3d 999, 1004, 124 Cal.Rptr. 668 (1975).

Connecticut has also recognized the validity of the attorney's retaining lien. In Gager v. Watson, 11 Conn. 168, 173 (1836), we stated: "An attorney, as against his client, has a lien upon all papers in his possession, for his fees and services performed in his professional capacity, as well as upon judgments received by him." This quoted passage obviously refers to both retaining liens on papers and charging liens on judgments. See also Hagearty v. Burns, supra, 506. The most recent Connecticut Supreme Court case to discuss the subject of retaining liens, Andrews v. Morse, 12 Conn. 444, 446 (1838), approved of the Gager holding and stated: "We only say, that [attorneys] have, in certain cases, of which this is one, such a claim upon [judgments and papers] as courts of law and equity will protect and enforce, until their lawful fees and disbursements are paid...."

The defendant argues that "[f]rom the lack of Connecticut case law on retaining liens, it is clear that they have not been viewed by the Connecticut courts as being self-executing." Citing Andrews v. Morse, supra, the defendant asserts that Connecticut does not recognize self-executing retaining liens but only a "modified version." The defendant claims that although Connecticut recognizes a right to a retaining lien, the lien is not self-executing but must be established by a court. The defendant argues that the words in Andrews, "courts of law and equity will protect and enforce," indicate that only a lien enforced by a court is recognized. We disagree. Although the court in Andrews dealt with a charging lien, there is nothing in that opinion to support the defendant's claim that only a retaining lien established by a court, as opposed to one that is self-executing, existed at common law. ³

The Andrews opinion also refers to a court's protection of the attorney's lien. The fact that protection of the lien is available in a court of law or equity does not defeat the plaintiff's claim that the retaining lien is self-executing. An attorney's retaining lien need not be established by a court; Hagearty v. Burns, supra, 506; but it certainly can be protected by a court. The only express statement that the Andrews court made concerning a limit on an attorney's lien is that it was not a lien similar to those of manufacturers and others. Andrews v. Morse, supra. This clearly refers to the right of a manufacturer to sell goods in its possession, a remedy not available to an attorney who has possession of a client's papers. The Flush, supra, 30; Eiduson Fuel & Hardware Co. v. Drew, 59 A.D.2d 1025, 399 N.Y.S.2d 764 (1977); 7 Am.Jur.2d, supra, § 323.

A self-executing attorney's retaining lien is not an absolute right but is merely a method for an attorney to protect his proper fee. There are a number of exceptions to the right to impose a retaining or possessory lien. See N. Thompson, "Attorneys' Fees and Liens," 85 Com.L.J. 136 (1980). It cannot be utilized, for example, if the attorney has withdrawn voluntarily or has been discharged for good cause, including negligence and other misconduct. The Flush, supra, 28; 7 Am.Jur.2d, supra, § 321. When a client has shown a need for the files, courts have ordered release upon payment or furnishing of adequate security. See, e.g., Eiduson Fuel & Hardware Co. v. Drew, supra, 59 A.D.2d at 1025-26, 399 N.Y.S.2d 764; annot., supra, 152. There are only rare circumstances when the files will be released without the furnishing of adequate security. Pomerantz v. Schandler, supra, 683; see, e.g., Hauptmann v. Fawcett, 243 App.Div. 613, 276 N.Y.S. 523 (papers were needed in defense of a capital murder charge), modified, 243 App.Div. 616, 277 N.Y.S. 631 (1935). Even in Hauptmann, the files were ordered returned to the attorney after their use. Therefore, barring unusual circumstances, such as prejudice to the rights of a client, an attorney is under no...