HCBA Lawyer Magazine Vol. 29, No. 2 | Page 43

seCure payMent With a Charging lien Marital & Family law Section Chair: Chris Givens - Givens Givens Sparks, PLLC this equitable right has been recognized for over a century. T he attorney’s charging lien is an equitable right — recognized for more than a century — to have the costs and fees due for services rendered in an action secured by the judgment or recovery in that action. A charging lien need not be adjudicated or enforced before entry of the final judgment. To perfect a charging lien on judgment proceeds, an attorney need only give timely notice. Although an attorney must give notice to perfect a charging lien, the interest created by a valid attorney’s charging lien arises by operation of law and relates back to the commencement of the attorney’s services. So it has priority over any judgment lien obtained after commencement of the attorney’s services. In re Washington,, 242 F.3d 1320, 1323 (11th Cir. 2001) (citing Miles v. Katz, 405 So. 2d 750, 752 (Fla. 4th DCA 1981)). This is significant because perfection of liens that arise by operation of law are not subject to the automatic stay in bankruptcy, and unlike judicial liens, they cannot be avoided in bankruptcy either. The automatic stay under Bankruptcy Code § 362, which goes into effect immediately upon the commencement of a bankruptcy case, ordinarily bars any act to perfect a lien against property of a debtor’s estate. But Bankruptcy Code § 362(b)(3) provides an exception for liens that cannot be avoided in bankruptcy. In other words, the automatic stay does not bar an attorney from perfecting a charging lien after a bankruptcy case has been filed so long as the charging lien cannot be avoided by a trustee in bankruptcy. Bankruptcy Code § 546 provides that a trustee in bankruptcy may not avoid an interest in property (e.g., an attorney charging lien) if generally applicable law permits the perfected lien to be effective against a previously acquired interest in the property. Some bankruptcy courts outside Florida have ruled that a charging lien does not fall within § 546 (meaning it can be avoided and perfection is therefore subject to the automatic stay) when a state statute provided for a charging lien and the statute did not provided that the lien related back. In re Hall, 2011 WL 4485774, at *5 (B.A.P. 9th Cir. Aug. 22, 2011); In re Veazey, 272 B.R. 486, 492-93 (Bankr. D. Kan. 2002). Because charging liens in Florida, however, relate back to the commencement of the attorney’s services, they cannot be avoided in bankruptcy, and perfection of the lien would not be subject to the automatic stay. While it is always a better practice to be paid up front, too often in family law cases we see assets dwindle before our eyes. And either ethical considerations or judges prevent access to those assets for payment. Rather than watch accounts receivable that may never be collected grow, it is the better practice to assert a charging lien so that you can be paid from the proceeds of your work. Take the time to perfect a charging lien. Author: Paul S. Maney - Paul S. Maney, P.A. Are you receiving HcBA’s emAils? HcBA regularly communicates with members via email. stay in the know by making sure your email is up-to-date in your member profile at hillsbar.com. NOV - DEC 2018 | HCBA LAWYER 41