Cetenko v. United California Bank

In Cetenko v. United California Bank (1982) 30 Cal.3d 528, the attorney's fee agreement provided that any amount recovered would be subject to a lien for attorney fees earned under the agreement. More than two years later, a judgment creditor of the client obtained a lien on the client's cause of action or eventual judgment under the predecessor of section 708.410 et seq. On appeal from an order granting the attorney's motion for release to him of the entire judgment he had obtained for the client, a unanimous Supreme Court held that the attorney's lien was valid and took priority over the judgment creditor's lien. The judgment creditor asserted several challenges to the lien's validity, but did not contend that the attorney's rate was excessive or that he had misrepresented his billable hours. After rejecting the creditor's challenges -- including that the lien was invalid because it was a "'secret'" lien (Cetenko, supra, 30 Cal.3d at pp. 532-533). There is good reason for this result. As the Supreme Court observed: "Public policy favors the conclusion we reach in this case. If an attorney's claim for a lien on the judgment based on a contract for fees earned prior to and in the action cannot prevail over the lien of a subsequent judgment creditor, persons with meritorious claims might well be deprived of legal representation because of their inability to pay legal fees or to assure that such fees will be paid out of the sum recovered in the latest lawsuit. Such a result would be detrimental not only to prospective litigants, but to their creditors as well." (Cetenko, supra, 30 Cal.3d at pp. 535-536.)