The Rule of Jacobs v. Papez is that an attorney may bring a single declaratory relief action against both the clients and a competing attorney lien claimant to enforce an attorney lien claim on settlement or judgment proceeds, under circumstances where the attorney obtained a recovery for clients and seeks to resolve competing lien claims without having to wait for other attorneys to first establish their liens in separate actions.
Appeal from judgment of dismissal in Superior Court, El Dorado County.
Plaintiff Appellant was Jeffrey L. Jacobs — the successor attorney who negotiated a $200,000 settlement and sought declaratory relief to determine rights to withheld settlement proceeds.
Defendant Respondent was Thomas M. Papez — the former attorney who filed a $60,000 attorney lien before withdrawing from representation.
The suit sounded in declaratory relief regarding competing attorney lien claims on settlement proceeds.
The key substantive facts leading to the suit were that three attorneys successively represented the Friedlands in a personal injury case under contingency fee agreements, with Papez filing an attorney lien for $60,000 after his representation ended, and Jacobs subsequently negotiating a $200,000 settlement with $67,000 withheld by the insurer for attorney fee disputes.
The procedural result leading to the Appeal: The trial court granted Papez's motion to dismiss, ruling that Papez was entitled to have the validity and amount of his lien determined first in a separate action before Jacobs could have his lien determined, and that it was procedurally improper for Jacobs to sue Papez in a declaratory relief action.
The key question(s) on Appeal: Whether a declaratory relief action against both the clients and a competing attorney lien claimant is a proper way for an attorney to seek to enforce his attorney lien, or whether the attorney must wait for other lien claimants to first establish their liens in separate actions.
The Appellate Court held that bringing a single action for declaratory relief against both the clients and a competing attorney lien claimant is a permissible way for an attorney to enforce an attorney lien claim on the proceeds of a settlement or judgment, allowing simultaneous resolution of all parties' claims without requiring each attorney to individually sue the clients first.
The case is inapplicable when an attorney sues only the competing attorney lien claimant without naming the clients as parties, as enforcement of attorney liens must be resolved between the contracting parties (attorney and client).
The case leaves open questions regarding the specific procedures for adjudicating lien priority when multiple attorneys have competing claims, and whether there are circumstances where sequential adjudication might still be required.
Counsel
For Appellant: Jeffrey L. Jacobs, in pro. per.
For Respondent: Thomas M. Papez, in pro. per.