BAR ASSOCIATION OF NASSAU COUNTY
COMMITTEE ON PROFESSIONAL ETHICS

Opinion No. 1991-1

(Inquiry No. 294 )

Re:
Retaining lien upon documents and other properties of the client to secure reimbursement of expenses advanced by attorney in the course of representation.

Digest:
An attorney may withhold documents and other property of the client in order to assert and protect a retaining lien for expenses advanced by the attorney without breaching the general duty to deliver a client’s property promptly.

Code Provisions:
DR 5-103 (A) (1)
DR 9-102 (Cl (4l
EC 5-7

Described Facts:
An attorney has handled several foreclosure matters for a client, who now oweS a sizeable legal fee. Attorney has withdrawn from further representation. Client has requested the forwarding of his files to successor counsel. Inquiring counsel has requested reimbursement for out-of-pocket expenses of foreclosure searches and service of process, and wishes to assert a retaining lien on the documents and other properties of the client to secure reimbursement for these expenses only.

Inquiry:
May an attorney, who has been replaced by new counsel, assert a retaining lien upon the documents and other properties of the client in order to secure reimbursement for expenses advanced by the attorney in the chance of the representation?

Determination:
Although an attorney generally has the professional obligation to deliver a client’s property to the client promptly when requested, that obligation may be subordinate to the attorney’s right to assert a retaining lien to enforce the right to be reimbursed for expenses advanced by the attorney in the course of the representation.

Analysis:
Disciplinary Rule 9-l02(C) (4) requires a lawyer promptly to “pay or deliver to the client…. as requested by the client … the funds, securities, or other properties in the possession of the lawyer which the client … is entitled to receive”. DR 9-l02(C) (4). BANC 87-40. This obligation does not, however, overcome the attorney’s right to be paid for services and expenses, and is subordinate the attorney’s right to assert a refuse to relinquish possession of the file in order to ensure payment of the attorney’s fee. See: DR 5-l03(A) (l) See: M.E. v S.G., 124 Misc. 2d 851,.478 N.Y.S. 2d 539; Cholst v Cholst, 75 A.D. 2d 527, 426 N.Y.S. 2d 772; Judiciary Law Sec. 475; BANC 87-40.

Where a lawyer’s fees and expenses remain unpaid, regardless o~ the reason ~or non-payment, the lawyer has a lien on all legal papers; for which the client has made a demand. New York County Opinion 609 (1972).

As this Committee discussed in BANC # 85-7:

At Common Law, the liens available to an attorney were of two kinds: (1) a retaining lien on all papers, securities or monies belonging to his client which came into his possession in the course of his professional employment which was, in essence, a general lien for the entire balance of the account, and was dependent, however, upon possession, and; (2) a charging lien, which was a judgment recovered through the attorney’s efforts, but this lien was not dependent upon possession, as the very reason for its existence was to save the attorney’s rights where he had been unable to get possession. In Re Heinsheimer, 214 N.Y. 361(1915). An attorney’s retaining lien is a lien for the entire balance of accounts on all papers, securities or monies belonging to a client in the possession of an attorney and is dependent upon the attorney’s physical possession of the client’s property. First Nat’l Bank of Ellenville v Hyman Novac Realt , 72 A.D. 2d 858 1979).

As this Committee observed in BANC 90-10 “A retaining lien permits an attorney to retain all property and papers of the client that came into his possession until he has been paid for his legal services. The retaining lien affords the attorney as any other workman who is entitled to retain the things upon which he has worked until he has been paid for his work. It is a possessory lien only, depending for its existence on the attorney’s possession of the papers. It is a passive right and cannot be actively enforced”. (citations omitted).

We conclude that inquiring counsel may ethically assert a retaining lien on the documents and other properties of his former client to secure reimbusement for expenses and payment for services rendered, and that counsel’s duty to deliver the documents and other properties to the client does not override the attorney’s right to retain possession in asserting the retaining lien.

The inquiry is answered in the affirmative.

[Approved by Executive Subcommittee on 1/15/91 approved by Full Committee 1/23/91]