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513 S.W.3d 325

Stone v. DuBarry

Kentucky Supreme Court

Decided December 15, 2016

Kentucky Supreme Court · decided 2016-12-15

Applies KY 376 § 376.460

Decided 2016-12-15

VENTERS, J.,

¶1CONCURRING BY SEPARATE OPINION:

¶2I agree with Justice Noble that Attorney Stone has no statutory attorney’s lien or contractual lien on the marital estate of Pennie and John Dubarry. I write separately to emphasize somewhat different reasoning regarding the statutory lien.

¶3Justice Noble’s conclusion that “KRS 376.460 does not apply in dissolution property division matters” focuses our attention on the kind of lawsuit involved (a dissolution of marriage action); I would focus instead on the nature of the property being subjected to a lien. The phrase “dissolution property division matters” also connotes to me a broader exclusion of matters from the attorney’s lien than my reading of the statute allows.

¶4KRS 376.460 does not differentiate among the kinds of cases to which it applies. It applies to “all claims ... put into [an attorney’s] hands for suit or collection or upon which suit has been instituted!.]” There is no general exclusion for dissolution of marriage cases brought under KRS Chapter 403. Instead, the statutory language limits the availability of an attorney’s lien to claims for “a recovery of money or property” with the lien for the attorney’s fee attached “upon the judgment recovered.”

¶5A claim in a marriage dissolution action for the equitable division of the marital estate is not a claim for the “recovery” of money or property, and for that reason the lien provided by KRS 376.460 does not extend to a judgment or decree allocating the litigants’ shares of the marital estate. One who has been assigned a share of his or her own marital estate has not “recovered” anything.

¶6The plain language of KRS 376.460 does not preclude the availability of an attorney’s lien to other property-related aspects of a divorce case under KRS Chapter 403. For example, the divorce litigant’s claim for restoration of pre-marital or non-marital property entangled in the marital estate is a claim for the “recovery of money or properly” under KRS 376.460, and a decree or judgment that secures the restoration of the property or its financial equivalent would be subject to an attorney’s lien under KRS 376.460.1 would not otherwise attempt to illustrate the possible situations in which a KRS 376.460 lien would attach to the property interests litigated in a divorce ease.

¶7I read Justice Noble’s opinion as imputing to KRS 376.460 a broad exclusion for dissolution related property matters, allowing a lien only for “ancillary” matters that may by chance be included. I read KRS 376.460 as having broad application to every claim for recovery of money or property, which, therefore, does not include the apportionment of a marital estate into just proportions under KRS Chapter 403. Although we approach the analysis from different perspectives we arrive at the same conclusion.

Wright, J., joins.
KELLER, J.

¶8CONCURRING IN RESULT ONLY:

¶9I concur with the result in this case. However, I disagree with the reasoning of both the majority and Justice Venters. As both the majority and Justice Venters note, KRS 376.460 states that an attorney lien attaches to “a recovery of money or property.” Both the majority and Justice Venters presume that one cannot “recover” marital property. I disagree.

¶10Recovery is: “1. The regaining or restoration of something lost or taken away. 2. The obtainment of a right to something (esp. damages) by a judgment or decree. 3. [Cjommon recovery. 4. An amount awarded in or collected from a judgment or decree.” RECOVERY, Black’s Law Dictionary (10th ed. 2014). As Justice Venters correctly notes, the “restoration of premarital or non-marital property entangled in the marital estate” would fall squarely within the first definition above—money or property that has been restored.

¶11However, both the majority and Justice Venters ignore the fact that, when a spouse contributes to marital property, that spouse gives up sole ownership in the contributed property because both spouses jointly own and have presumably equal rights to the property. When marital property is divided by the court in a judgment or decree, each party gets free and clear title to that portion of the marital property awarded and gives up any claim to that portion of the marital property that is awarded to the other spouse. Thus, marital property falls within the first definition because each spouse regains, or recovers, an undivided interest in his or her share of the property. Furthermore, marital property falls within the second definition because it is the obtainment of something, free and clear title to property, by judgment. Finally, marital property falls within the fourth definition, because, when divided, it is “an amount awarded in ... a judgment or decree.”

¶12In this case, Pennie ceded any ownership interest she had in the marital residence prior to the final judgmenVdecree and before Stone attempted to perfect his lien. Therefore, when Stone attempted to perfect his lien, Pennie retained no interest in the property he attached. If Pennie had retained an interest in the marital residence until the date of sale, then Stone could have attached his lien to her interest. Furthermore, Stone could have attached his lien to the $20,000 that John had agree to pay Pennie, the amount of marital property she recovered through judgment/decree.

¶13Additionally, I note that the majority’s holding has implications beyond domestic cases. Like a married couple, partners in business, shareholders in corporations, and members in LLCs have shared ownership interest in property. Taken to its logical conclusion, the attorney fee lien statute would not apply to any business disputes because the parties are, after all, simply dividing property in which they already have an ownership interest.

¶14Finally, I believe that there are a significant number of statutory attorney fee liens that have been attached to marital property, in particular marital residences. The Court has not given any guidance regarding how to deal with those liens. Do they simply cease to exist as of the date this opinion becomes final? Does a person objecting to the lien have to move to have it removed? Are the attorneys who perfected the liens subject to actions for placing a cloud on title? Do attorneys who have perfected such liens have to remove them? If so, within what time frame? What, if any, ethical implications are there for attorneys who hold such liens? When the Court undertakes what I perceive to be a sea change, I believe it is imperative and the *337duty of the Court to offer guidance to the bench and bar.

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