Christopher N. Link, P.A., v. Rut, No. 4D12-4320 (Fla. 4th DCA 2015)

In this case, we will discuss the dynamics of an appellate judge sitting in the “swing vote” seat, the priority of attorneys’ charging liens and opinions that find a legally cognizable way to do equity rather than strictly adhering to existing law.

The executive summary of the facts: two parties entered into a settlement agreement. The agreement provided indemnification for attorneys’ fees to the prevailing party, should the settlement break down. The settlement broke down. The attorney withdraws from the case and files a charging lien. Down the road, the trial judge grants and prioritizes attorneys’ fees first to the prevailing party, then to the attorney with the charging lien.

The above facts are the center of the appellate maelstrom where the appellate opinion spawned a majority and dissenting opinion. The majority focused on the equity of the case, i.e., “The Justice,” and the dissent focused on the law, i.e., “The Law’s the Law.”

The Swing Vote Seat

The swing vote is the game changing judge who controls the direction of the law. In that sense, the swing vote judge does not have to write the opinion but instead steers the law in the direction he or she wants it to go. Put another way, if the swing vote went the other way, the dissent would be the majority and the majority would be the dissent. Thus, one vote controls the direction of the law.

At the highest judicial level, one need only look to the U.S. Supreme Court. Think how many 5-4 votes determine the delicate balance of the law? In that respect, the swing vote in that lofty court can have a dramatic effect on everyone in America. Here, it has a dramatic effect on practitioners in the Fourth District.

Priority of Charging Liens in the Fourth District

Before this opinion, it was crystal clear in the Fourth District that attorney charging liens took priority. Thus, if a pre-existing contract called for attorneys’ fees, an attorney’s charging lien took priority. This opinion eviscerates this rule as enunciated in Rebecca J. Covey, P.A. v. Am. Import Car Sales, 944 So. 2d 1202 (Fla. 4th DCA 2006) by carving out an equitable basis to avoid the rule and instead review lien priority on a case-by-case basis.

Covey, incidentally, was based on several prior Fourth District opinions, some dating back into the last century. Regardless, Covey stated that a charging lien was superior to the judgment lien entered in favor of the litigant because the litigant did not obtain its judgment until after the attorney (Covey) commenced her representation.

The majority ultimately distinguished Covey and its inherent legally-based case ancestry.  The majority opinion instead vectored into equitable principles stating: “Equity came into existence as a means of granting justice in cases wherein the law by its rigid principles was deficient. It has been truly been called a court of conscience. It should not be shackled by rigid rules of procedure and thereby preclude justice being administered according to good conscience.” Degge v. First State Bank of Eustis, 199 So. 564 (Fla. 1941).

Then, once the majority determined that the case should be decided on equitable principles, the opinion dictated a new rule: In a situation where the party was awarded indemnification for attorneys’ fees and the retainer agreement came into existence after the party’s right to indemnification, the indemnification agreement takes priority. Hence, the opinion adopts a first in line first in right analysis. That analysis is logical and consistent with equity when it stated the trial court “did not abuse its discretion when determining “that the party’s claim was superior in time and first in right to those of” the law firm.

The majority opinion goes on to state:

“A law firm should not be able to benefit from a charging lien that seeks to undermine an indemnification agreement that predates the retainer agreement.”

The majority opinion acknowledged the prior Covey decision stating that it was true that Covey gave priority to an attorney’s charging lien over a subsequent judgment lien. However, the majority distinguished Covey on the facts (not the rule of Covey).  Interestingly, the majority limited the “prioritization to the unique facts before [it].”

As to those unique facts, however, the dissent points out that they had no bearing on the trial court’s decision and, in fact, the trial court had ruled years earlier that the attorney had a charging lien.

Follow Equity or Law = Public Policy or Stare Decisis

Clearly the majority opinion is a follow-justice decision. We know that this is a justice decision because it states: “Were we to decide otherwise, it would encourage lawyers to challenge. . . agreements concerning indemnification rights to fees with impunity.” That being the case, attorneys know that their charging lien would take priority over any challenged agreement.

On the other hand, we know that the dissent is a follow-law opinion. The dissent states: “I can find no authority to give such priority to a judgment lien based upon the date of the execution of a contract on which the judgment is based, rather than the date when the judgment was obtained.” The dissent eschews “policy” as a means to override the rule of law.

Ramifications of this Opinion on Attorney’s Charging Liens

Lawyers in the Fourth District can now expect to argue the equity of their charging liens. This will occur both at the trial and appellate level. Although the case limits the prioritization of the charging lien to the facts of the opinion, any lawyer worth her salt will argue the facts in their case mirror the facts in this case. Thus, lawyers will have to be careful in maintaining charging liens. Quite frankly, it is impossible to predict what direction the Fourth District will go from here as there are now two distinctly different and opposed cases.