Contingency Fee Contract Does Not Trump Homestead Protection - Regardless of Whether Contingency Occurs

In Quiroga v. Citizens Property Insurance Corporation (3D08-2942), the Third District affirmed "an order denying [a] law firms motion to impress a charging lien on the homeowner’s insurance proceeds for damages caused by two hurricanes."  The court stated:

The parties do not dispute the hurricane-damaged property is constitutionally exempt homestead property....In the event a homestead is damaged through fire, wind or flood, the proceeds of any insurance recovery are imbued with the same privilege....Because Quiroga did not and, as a matter of public policy in this State, cannot through an unsecured agreement, such as the contingent fee agreement in this case, enter into an enforceable contract to divest himself from the exemptions afforded him through Article X, section 4(a), see Chames v. DeMayo, 972 So. 2d 850, 853 (Fla. 2007), this Court is compelled to affirm the order under review, the equities of the matter notwithstanding.

Difference Between Retaining Lien & Charging Lien - Order Denying Injunction Reversed

In Brickell Place Condo Association, Inc., et al. v. Joseph H. Ganguzza & Associates, P.A. (3D09-1963), the Third District held that the attorneys asserting a retaining lien did not have a right to do so because:

we find that the fee arrangement for collection and foreclosure matters was, in reality, a contingent fee arrangement and a law firm may not assert a retaining lien for fees owed in a contingency fee case until the contingency has occurred, we find that the retaining lien was unlawful.

The court stated:

At the hearing on the Associations’ motion, the Associations argued that for collection and foreclosure matters, the Associations and the law firm operated under a contingency fee arrangement. The Associations, therefore, claimed that the law firm, could only recover the reasonable value for its services, limited by the maximum contract fee, upon the successful occurrence of the contingency. Because the contingency upon which the services were based has not yet occurred (the collection of the delinquent unit owners’ fees), the law firm is not yet entitled to be paid for its services and the retaining lien filed by the law firm cannot be legally or ethically maintained. We agree.

A retaining lien differs from a charging lien. A charging lien is placed on any monetary recovery due the client at the conclusion of the lawsuit...On the other hand, a retaining lien is a passive lien and rests entirely on the right of an attorney to retain possession of his client’s papers, money, securities, and files as security for payment of the fees and costs earned by the law firm to that point.

***

Because the contingency has not occurred, the law firm could not assert a retaining lien for fees it contends it is owed on collection matters that were still pending when it was discharged. If the law firm believes it is owed money for services it rendered in the collection of delinquent unit owner fees, it may file a charging lien and is entitled to the reasonable value of its services on the basis of quantum meruit, limited by the contract flat fee the parties agreed to.

Charging Lien Not Proper Prior To Entry Of Judgment

In Walia v. Hodgson Russ LLP (4D09-457), the Fourth District reversed the imposition of a charging lien.  A charging lien:

[t]he charging lien is an equitable right to have costs and fees due an attorney for services in the suit secured to him in the judgment or recovery in that particular suit. It is not enough to support the imposition of a charging lien that an attorney has provided his services; the services must, in addition, produce a positive judgment or settlement for the client, since the lien will attach only to the tangible fruits of the services.

Rudd v. Rudd, 960 So. 2d 885, 887 (Fla. 4th DCA 2007)...

An essential prerequisite to imposition of a charging lien is that the underlying litigation produces a positive judgment or settlement – in other words, some “tangible fruits of the attorney’s service” for the benefit of the client...If the litigation produces no judgment of monetary value for the client, the court may not impose a charging lien for the attorney’s benefit.

Because a judgment had not been entered, the charging lien was not proper.

Any Party on Notice of Attorney Lien has Duty to Protect Rights of Lienor

On rehearing in Hall, Lamb & Hall, P.A. v. Sherlon Investments Corp. (3D07-2783) the Third DCA held that to perfect a charging lien "the lienor-attorney need only demonstrate that he or she provided the parties to the litigation with timely notice of the interest." When both plaintiff and defendant are aware of the attorney lien, both are responsible to inform the lienor, or the court, in order to protect the lienors rights.