F;;§D
saw r 05 AP`PE
W;FE EOF H’Asl'l'iii§rgen
v zunnusiu m guy
|N THE COURT OF APPEALS OF THE STATE OF WASH|NGTON
ln the l\/latter of the l\/larriage of:
_ RHEA J. ROLFE,
)
, ) No. 75266-9-|
NATALYA SHUL|KOV, )
\ ) tDlVlSlON ONE `
Respondent, )
) UNPUBL|SHED OP|NlON
and ` ' ) 7
” )
ALEX SHUL|KOV, )
)
Respondent, )
' )
)
)
)
Appe||ant. FILED: August 14, 2017
)
APPELchK, J. - Ro|fe appeals the trial court’s order invalidating her
' attorney lien and releasing funds to Shulikov. She contends that RCW
60.40.010(1)(d) permits attorney liens over the “proceeds"’ of an action, and does
not provide an exception for dissolution proceedings. She argues that the trial
court erred in awarding attorney fees and imposing sanctions against her. We
reverse the court’s order, vacate the attorney fees and sanctions, and remand for
further proceedings consistent With this opinion.
Vl
NO. 75266-9-|/2
FACTS
Natalya Shulikov hired Rhea Ro|fe to represent her in a dissolution
proceeding Shulikov signed a written fee agreement to pay Ro|fe for services
rendered. .
ln August 2015, Shulikov and her former husband reached an agreement
pursuant to CR 2A. They agreed that the husband would pay Shulikov a sum of
$7,890 per month. This figure included $1,500 in maintenance and $1,581 in child
support. The remainder constituted a monthly payment for the business the couple
had jointly owned. Ro|fe was to draft final orders according to the CR 2A
agreement ` 7
7 On February 23, 2016, Ro|fe filed a notice of intent to withdraw as Shulikov’s
counsel, effective Marcwh 3. And, she filed a notice`of attorney’s claim of lien under
RCW 60.40.010, seeking reasonable compensation for services in the amount of
$16,886. On February 25, Rolfe filed a motion to establish judgment for attorney
fees pursuant to chapter 2.44 RCW. Ro|fe sought a judgment for her fees as a
condition of her withdrawal from representing Shulikov in the dissolution On
March 10, the court denied Ro|fe’s motion to establish judgment for attorney fees
under chapter 2.44 RCW.
Aware of the attorney lien, Shulikov’s former husband made payments
under the property settlement agreement into the court registry, rather than directly
to Shulikov. He continued to pay Shulikov directly the sums due for spousal
maintenance and child support.
NO. 75266-9-|/3
Shulikov, having retained new counsel, filed a motion to release the funds
in the court registry to her. She claimed that Ro|fe could not attach a lien under
the attorney lien statute, because she did not have a judgment to which the lien
could attach. Shulikov also sought attorney fees and sanctions. ln response, Ro|fe
argued that the court should release the funds in the court registry to her pursuant
to her attorney lien.
On April 22, the court granted Shulikov’s motion. The court found that
because the funds that had been paid into the court registry were part of the
property settlement reached by the parties, the funds were not proceeds of an
action subject to an attorney lien under RCW 60.40.010. The court ordered the
funds in the court registry to be disbursed to Shulikov. The court also awarded
attorney fees in the amount of $3,500 against Rolfe. And, the court imposed
sanctions against lRolfe in the amount of $500 for filing the lien under these
circumstances Ro|fe appealed the order granting Shulikov’s motion to release
funds and awarding fees and sanctions.
On August 5, the court entered the decree of dissolution, The decree
incorporated by reference the CR 2A agreement that the parties had previously
executed.
DlSCUSS|ON
` Rolfe asserts that she had a valid attorneylien on the proceeds of the
dissolution, including the monthly payments under the property settlement
No.` 75266-9-|/4 _
j agreement1 She contends that the trial court erred in awarding attorney fees and
sanctions against her. f
i. Rcw 60.40.010
l Rolfe contends that the trial court erroneously interpreted RCW 60.40.010
in deciding to disburse funds from the court registry to Shulikov. Shulikov responds
that the trial court properly concluded that the property distribution was not subject
f to an attorney lien, because the property distribution did not constitute “proceeds”
within the meaning of`Rcw 60.40.010(1)(d). `
The meaning of RCW 60.40.010 is a`question of law that this court reviews
de novo. Aiken, St. Louis & Silieq, P:S. v. l_inth, 195 Wn. App. 10, 15, 380 P.3d
_ 565 (2016). Our fundamental objective in interpreting a statute is to ascertain and
carry out the legislature’s intent. ~Smith v. l\/loran: Windes & Wonq, PLLCl 145 Wn.
App. 459, 463, 187 P.3d 275 (2008). Where the meaning of a statute is plain on
' its face, we give effect to the plain meaning. ld_. lf a statute is ambiguous, we look
to outside sources, such as legislative history, to determine legislative intent. "ld
at 463-64. We will notinterpret a statute in such a way as to render any portion
1 As a` preliminary matter, Shulikov argues that this is an improper
interlocutory appeal. We disagree RAP 2.2(a)(3) provides that a party may
appeal from “[a]ny written decision affecting'a substantial right in a civil case that
in effect determines the action 'and prevents a final judgment or discontinues the
action.” This court has previously held that an order setting aside an attorney lien
was appealable under RAP 2.2(a)(3), because it affected the attorney’s substantial
right to monetary relief and it.determined the action as to the attorney lien.
Ferquson Firm, PLLC v. Teller & Assocs., PLLC, 178 Wn. App. 622, 628-30, 316
P.3d 509 (2013). The same is true here. Therefore, the order disbursing funds to
Shulikov is appealable under RAP 2.2(a)(3). ‘ ,
4
NO. 75266-9-|/5
meaningless or that results in strained meanings or absurd consequences ii at
464. `
An attorney may sue his or her client for unpaid fees Ferguson Firml PLLC
v. Teller & Assocs., PLLC, 178 Wn. App. 622, 631, 316 P.3d 509 (2013). Or, an
attorney may assert a lien to ensure payment without having to sue the client. g
The attorney lien statute, RCW 60.40.010, provides in part,
(1) An attorney has a lien for~his or her compensation, whether
specially agreed upon or implied, as hereinafter provided:
(a) Upon the papers of the client, which have come into the
attorney’s possession in the course of his or her professional
employment;
(b) Upon money in the attorney’s hands belonging to the
client; '
(c) Upon money in the hands of the adverse party in an action
or proceeding, in which the attorney was employed, from the time of
giving notice of the lien to that party;
(d) Upon an action, including one pursued by arbitration or
mediation, and its proceeds after the commencement thereof to the
extent of the value of any services performed by the attorney in the
action, or if the services were rendered under a special agreement,
for the sum due under such agreement; and
(e) Upon a judgment to the extent of the value of any services
performed by the attorney in the action, or if the services were
rendered under a special agreement, for the sum due under such
agreement, from the time of filing notice of such lien or claim with the
clerk of the court in which such judgment is entered, which notice
must be filed with the papers in the action in which such judgment
was rendered, and an entry made in the execution docket, showing
name of claimant, amount claimed and date of filing notice.
The statute defines proceeds as, “any monetary sum received in the action.” RCW
60.40.010(5).
No. 75266-9-|/6
The first two sections of the`statute, RCW 60.40.010(1)(a) and (b), pertain
to possessory attorney liens These liens apply to the client’s papers or money in
the attorney’s hands RCW 60.40.010(a), (b). The Court of Appeals has
recognized that due to the possessory and passive nature of these liens, they are
generally not enforceable by foreclosure and sale. ln re l\/larriaqe of Glick, 154
Wn. App. 729, 732, 230 P.3d 167 (2009). But,RCW 60.40.030 creates summary
adjudication procedures for liens that are asserted against the client’s money or
papers ld_. at 733.
The other three sections pertain to charging liens RCW 60.40.010(1)(0)-
(e); Ross v. Scannell, 97 Wn.2d 598, 604, 647 P.2d 1604 (1982). Charging liens
have the capacity to be adjudicated or enforced. l_d_. The summary adjudication
procedures outlined in RCW 60.40.030 do not apply when an attorney claims a
lien on something other than the money or papers of the client. King County v.
Seawest lnv. Assocs, LLC, 141 Wn. App. 304, 311(, 170 P.3d 53 (2007). ln
Seawest, the court acknowledged that the statute does not set out a procedure for
enforcing charging liens g at 315. But, it concluded that trial courts are
authorized to fashion appropriate proceedings to adjudicate this type of attorney
lien. l_d_. Such an action need not be separate from the underlying proceeding. ld_.
Rolfe’s claim of attorney lien did not specify under which provision of RCW
60.40.010 she`claimed a lien, Her notice stated only,
NOT|CE lS HEREBY GlVEN that the undersigned attorney
claims an attorney’s lien pursuant to RCW 60.40.010 for her services
rendered to Petitioner, Natalya Shulikov, with interest from the date
No. 75266-9-|/7
of filing this claim of lien. Said lien is for reasonable compensation
for attorney services rendered to date in the amount of $16,886.
After Shulikov moved to release funds from the court registry, Ro|fe clarified the
basis for her attorney lien, She asserted that her lien attached to the “proceeds”
of the property settlement agreement. And, she contended that the lien applied to
money in the hands of Shulikov’s former husband, the “adverse party” in the
dissolution action. Thus, we interpret Ro|fe’s claim of attorney lien as based on
RCW 60.40.010(1)(0) and (d).
The trial court appears to have based its ruling on RCW 60.40.010(1)(d). lt
concluded,
This is a family law action for legal separation or dissolution of a
marriage. The funds paid into the registry of the court by respondent
husband are part of the property settlement/CR 2A agreement
reached by the parties in this family law action, These property
settlement funds are not proceeds of an action subject to an
attornev’s prejudgment lien under RCW 60.40.010 and should be
disbursed by the clerk of the court to petitioner wife, Natalya
Shulikov, forthwith.
(Emphasis added.)
Thus, this case involves which funds an attorney lien may be asserted
against. The statute and case law provide for two types of funds that clearly cannot
be the basis for an attorney lien. First, an attorney lien may not be asserted against
child support. RCW 60.40.010(6); see also Fuqua v. Fuqua, 88 Wn.2d 100, 107l
558 P.2d 801 (1977). Second, an attorney lien cannot be asserted against the
client’s real property. Bgs_s_, 97 Wn.2d at 605.
Washington courts have not squarely addressed whether an attorney lien
can attach to a property settlement agreement in a dissolution case. l-lowever,
No. 75266-9-|/84
several cases have assumed that funds awarded in a dissolution action can be the
’_ subject of an attorney lien, ln _Q@l_<, the attorney lien was based on'the client’s
money in the attorney’s possession and on a judgment 154 Wn. App. at 733. This
lien was unsuccessful, because the attorney had failed to identify any of the client’s
money in the attorney’s possession, or a judgment to which the lien could attach.
ld_. at 733-34. The court noted that the attorney “has not alleged the existence of
any judgment in the underlying dissolution proceeding to which her lien could
attach.” ld_. at 734. This language suggests that it was the lack of a judgment that
invalidated the attorney lien, not the fact that the underlying matter was a .
dissolution proceeding 1
ln ln re Trustee’s Sale of Real Propertv of Whitmire, 134 Wn. App. 440, 444,
140 P.3d 618 (2006), the attorney/represented the wife ina dissolution action. The
trial court awarded the wife a judgment ld_. To pay~this judgment, the husband
was ordered to refinance the family home and pay the mortgage on the home. ld_.
The attorney filed an attorney lien after the wife failed to pay for his services lg;
The attorney also filed a separate lawsuit against the wife, and obtained a
judgment against herfor his attorney fees g The husband failed to refinance the
home or pay the judgment he owed to the wife. _|g As a result, the mortgage
holder foreclosed, and the home was sold at a foreclosure sale, with a surplus of
$59,287. ld_. Then, the wife died. jc_i; The attorney sought to disburse some of
the surplus funds from the foreclosure sale to satisfy thewife’s unpaid attorney
fees l_