April 13, 2011
In
Grimes v. Crockrom, ___ N.E.2d ___ (Ind. Ct. App. 2011), Cause No. 45A03-1008-CT-491, a client sought documents from her former attorney's file and the attorney asserted that he needed security for the payment of an attorney's lien before producing those documents. Today, the Indiana Court of Appeals resolved this dispute, clarifying the scope and extent of attorney's liens.
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Crockrom hired Grimes to represent her in a medical malpractice action on an hourly basis. After he filed a proposed complaint for damages with the Indiana Department of Insurance, Grimes withdrew as Crockrom's counsel. Crockrom's new counsel was unable to obtain certain medical records that were in Grimes's file. Grimes said that he would release those records if Crockrom paid the attorney's fees owed him or provided adequate security that those fees would be paid. Crockrom refused to provide adequate security and issued a subpoena
duces tecum to Grimes demanding that he produce the medical records. Grimes moved to quash the subpoena and the trial court denied that motion.
On appeal, the Court recognized an attorney's common law "right to retain possession of a client's documents or other property which comes into the hands of the attorney professionally, until a general balance due the attorney for professional services has been paid." The trial court could only order that Grimes provide those documents if it provided for adequate security for the payment of the outstanding fees. In a footnote, the Court noted that attaching the lien to the settlement or favorable judgment in the pending action was inadequate security.
Crockrom argued that Grimes was not entitled to adequate security for his lien because he did not provide any documentation of the amount she owed. The Court held that Grimes's failure to include this documentation did not invalidate the lien. "[T]he reasonableness of a fee, as reflected by an attorney's lien, is irrelevant to the determination of whether the lien has been established."
Crockrom then argued that the contract between she and Grimes provided her with the right to those medical records. However, the Court found that Crockrom's access to the file and Grimes's retaining lien are not mutually exclusive.
Finally, the Court instructed us on the proper procedure an attorney should follow when in this situation. It held that "[t]he amount of security should correspond with the amount of fees owed." Therefore, the trial court was obligated to hold a hearing on the attorney's fees claimed by Grimes, so that it could then determine what amount constitutes adequate security.
Thus, the lesson in this case to attorneys seeking adequate security for the payment of an attorney's lien is to present evidence regarding the amount and reasonableness of the fee in the motion to quash, so that the trial court will have all of the information necessary to determine what would be adequate security for your attorney's lien.
Lessons:
- An attorney is entitled to adequate security for the payment of outstanding attorney's fees if a court orders the attorney to produce portions of a former client's file.
- Attaching an attorney's lien to a settlement or favorable outcome of the client's case is inadequate security for the payment of an attorney's lien.
- The amount of security that is adequate should correspond with the amount of the lien.
- An attorney seeking adequate security for the payment of an attorney's lien should present evidence of the amount and reasonableness of the fee.
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