Corporate

Delaware Court of Chancery Addresses Attorney’s Charging Lien

 Zutrau v. Jansing and ICE Systems, Inc., C.A. No. 7457-VCP (Dec. 8, 2014) [an enhanced version of this opinion is available to lexis.com subscribers].

This blog post should be of interest to lawyers who want to be paid for their services. Even if the court harshly rejects a good faith argument, or the client is unhappy with the result, most lawyers still need to earn a living and need to be paid regardless if the client achieves the result she hoped for and even if the court belittles the best efforts of the lawyer based on the facts presented.

The Court of Chancery issued two letter rulings in this matter on the same date. The more interesting of the two December 8, 2014, letter rulings–for those lawyers who are not independently wealthy–was a decision addressing the charging lien of the attorney who withdrew shortly after the trial.

The court recognized that the Delaware Supreme Court recently held that a charging lien was well established in common law, and even though Delaware has no relevant statute, Delaware recognizes the right of an attorney to assert a charging lien.  The reasoning behind the charging lien rests on the theory that one should not be permitted to profit by the result of litigation without satisfying the monetary demand of his attorney.  In addition:  “An attorney’s special or charging lien is an equitable right to have costs advanced and attorney’s fees secured by the judgment entered in the suit wherein the costs were advanced and the fee earned.

In connection with deciding the charging lien, the court addressed the fee agreement between the client and the attorney seeking the entry of a charging lien, as well as the appropriate amount of the fees subject to the charging lien, and whether the costs of an expert retained on behalf of the plaintiff should be included in the amount of the lien.

The other decision was a 22-page ruling (which followed a post-trial opinion on July 31, 2014, as well as a damages order of the same date). That decision addressed a pro se motion which the court considered as a motion to amend the judgment under Chancery Rule 59(e) or in the alternative, a motion for a new trial under Rule 59(a), but also considered the plaintiff’s suggestion that the motion should be reviewed as one for reargument under Rule 59(f).  The court also interpreted the pro se motion as one under Rule 15(b) seeking to amend the pleadings, as well as a request for a stay pursuant to Rule 62(b).  Because the court decided the other motions, the request for a stay pending the disposition of the motion was considered moot.

 Read more Delaware business litigation case summaries and commentary on Delaware Corporate and Commercial Litigation Blog, a blog hosted by Francis G.X. Pileggi, of Eckert Seamans.

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