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Law Firm Representing Wife in a Divorce Proceeding Entitled to Charging Lien Pursuant to Judiciary Law 475 But Not Entitled to Money Judgment with Interest

In reversing Supreme Court, the Second Department determined the law firm which represented the wife in a divorce was entitled to a charging lien for outstanding legal fees (to be paid from the proceeds of the upcoming sale of the marital residence).  However, in the absence of a plenary action, the law firm was not entitled to enter a money judgment with interest (Judiciary Law 475):

Judiciary Law § 475 provides that, from the commencement of an action in any court, the attorney who appears for a party has a lien upon his client’s cause of action, claim, or counterclaim, which attaches to a verdict, report, determination, decision, judgment, or final order in his client’s favor, and the proceeds thereof. “A charging lien is a security interest in the favorable result of litigation, giving the attorney equitable ownership interest in the client’s cause of action and ensuring that the attorney can collect his fee from the fund he has created for that purpose on behalf of the client” … . ” Where an attorney’s representation terminates upon mutual consent, and there has been no misconduct, no discharge for just cause, and no unjustified abandonment by the attorney, the attorney maintains his or her right to enforce the statutory lien'” … . In a matrimonial action, a charging lien will be available ” to the extent that an equitable distribution award reflects the creation of a new fund by an attorney greater than the value of the interest already held by the client'” … . Wasserman v Wasserman, 2014 NY Slip Op 05535, 2nd Dept 7-30-14

 

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