Langerman Law Offices, P.A. v. Glen Eagles (CA1 3/3/09)

This is a case about judgments and charging liens, and why there was one of the former but none of the latter.

Langerman represented a plaintiff in suing GlenEagles. The jury awarded the plaintiff $100,000 but that was less than the defendant’s Offer of Judgment. The court awarded GlenEagles over $150,000 in Rule 68 sanctions, which was about $30,000 more than the plaintiff’s award plus costs. The trial judge signed a form of judgment in the plaintiff’s favor for the jury award and for costs and in the defendant’s favor for the sanctions.

The plaintiff then filed bankruptcy. She and GlenEagles  worked out a settlement of their respective claims by which GlenEagles would get an unsecured claim for the $30,000.

The bankruptcy judge was about to sign it when Langerman filed this action. The trial court dismissed the case. The Court of Appeals affirmed.

Langerman claimed a charging lien against the awards to the plaintiff. The court held that although there were three awards, there was for lien purposes one judgment, by which the plaintiff ended up owing money to GlenEagles. The common-law charging lien exists, the court pointed out, to ensure that the lawyer will be paid out of the fund generated by his or her efforts. Since Langerman’s efforts resulted in no fund, it had no lien.

We do not know what advice lawyer gave to client about accepting the Offer of Judgment;  it may not have been the lawyer’s fault that the client ended up bankrupt despite winning a six-figure award (though interfering with the client’s bankruptcy settlement for the lawyer’s gain does seem a bit much.) But the court pointed out, by citing a case from Nevada, that there would be no lien even if the lawyer had advised her to accept it. You can’t file a lien on a loss.