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Putting a Milking Stool Behind a Horse Does Not Make it a Cow: “Accountants’ Charging and Retaining Liens” in Florida

Family Law

In family law practice, in particular, lawyers become familiar with seeing their opposite numbers file notices of charging liens, and similar filings, and themselves taking such steps, in an effort to secure payment of their attorneys’ fees. So, seeing such a docket entry as filed by, say, the fictional law firm of Maxis, Simulacra, & Lykenesse, LLC, is commonplace.

But what about if the same paper is instead filed by one Ms. Ruth Appleseed, CPA? Is there even such a thing as an accountant’s charging lien? What about a retaining lien asserted by an accountant?

My firm had certainly never heard of either one. Until recently, when an accountant, employed by an opponent as an expert witness in a family law matter, filed a motion asserting a purported charging lien.

It was and is our position that neither the fictional Ms. Appleseed, nor any accountant, fictional, or real, has any standing to claim a charging or retaining lien in Florida. The argument can begin with the very definition of the terms. In Litman v. Fine, Jacobson, Schwartz, Nash, Block & England, P.A., 517 So. 2d 88, 91 (Fla. 3d DCA 1987), rev. den., 525 So. 2d 879 (Fla. 1988), the court defined a charging lien as “an equitable right to have costs and fees due an attorney for services in the suit secured to him in the judgment or recovery in that particular suit.”1 The argument is further strengthened, twice in fact, when one looks at the caselaw defining the individual elements of the remedy: “There are four requirements for a valid charging lien: (1) an express or implied contract between attorney and client; (2) an express or implied understanding for payment of attorneys’ fees out of the recovery; (3) either an avoidance of payment or a dispute as to the amount of fees; and (4) timely notice.”2

A similar analysis applies to retaining liens. In Leiby Taylor Stearns Linkhorst & Roberts, P.A. v. Wedgewood Air Conditioning, Inc., 801 So. 2d 127 (Fla. 4th DCA 2001),the appellate court cited the same Daniel Mones, P.A., case cited immediately above, noting “In Daniel Mones…the supreme court discussed an attorney’s right to a retaining lien: In Florida an attorney has a right to a retaining lien upon all of the client’s property in the attorney’s possession, including money collected for the client….Unlike a charging lien, a retaining lien covers the balance due for all legal work done on behalf of the client regardless of whether the property is related to the matter for which the money is owed to the attorney…(citation omitted).”3 In a mere two sentences, the court reaffirmed, no less than five times, the notion that a retaining lien is one available to an attorney.

Now admittedly, these cases do not involve claims by accountants asserting such liens, so all these cases are factually inapposite. Thus, the above cases do not go so far as to explicitly state that charging liens and retaining liens are remedies available solely and exclusively to lawyers, and not to anyone else (such as accountants). There are many reasons why these cases in fact mean just exactly that.

Under the doctrine of “expressio unius est exclusio alterius,” the mention of one thing implies the exclusion of another.4 Stated more forcefully, the expression of one thing is the exclusion of the other.5 In other words, when a provision of law expressly describes items or things that are subject to that provision, an inference must be drawn that items not included by specific reference were intended to be omitted or excluded.6

So, since all the Florida caselaw definitions specifically refer to the lienor of a charging or retaining lien as an “attorney,” there is a good argument that the intention of such opinions is that, conversely, nonlawyers cannot properly assert such liens under Florida law. While there do not appear to be reported Florida appellate opinions specifically holding that accountants cannot assert charging or retaining liens, there are additional reasons why that should be true as well.

For example, at least as to charging liens, there is the additional issue of causation. Putting aside the dichotomy between attorneys and accountants, momentarily, even as to lawyers it is not enough that an attorney is purportedly simply owed money by a client, which will then automatically entitle the lawyer to a lien on any proceeds the client might be awarded later in the case.

Rather, Florida courts have repeatedly rejected the contention that simply because an attorney goes unpaid by a client, he or she is entitled to whatever judgment or settlement the client might later receive as a result of the work of a different person, such as successor counsel. In Rochlin v. Cunningham, 739 So. 2d 1215 (Fla. 4th DCA 1999), for example, an attorney agreed to represent a woman, Cunningham, in a paternity action against the man believed to be the father of her child.7 After nine months, the woman dismissed the attorney and retained another attorney who proceeded to settle the action.8

The trial court denied the first attorney a charging lien, because she was not the attorney who obtained the benefit for the client. The appellate court affirmed, opining:9

“[A]ppellant contends that the trial court erred in failing to grant her a charging lien for the full amount of her fees in the paternity action. She also claims that, to the extent the trial court found $5,000.00 to be a reasonable fee for her services, it should have entered a charging lien for that amount.

“In order to obtain a charging lien for an attorney’s services, an attorney must “produce a positive judgment or settlement for the client, since the lien will attach only to the tangible fruits of the [attorney’s] services.” Litman v. Fine, Jacobson, Schwartz, Nash, Block & England, P.A., 517 So. 2d 88, 91-92 (Fla. 3d DCA 1987); see also Cole v. Kehoe, 710 So. 2d 705, 706 (Fla. 4th DCA 1998) (denying the wife’s former attorney’s claim for attorneys’ fees in securing his charging lien, because his actions “did nothing to contribute to the dissolution action and the resulting ‘fruits’ reaped by the wife”). The fact that the final settlement agreement included some terms that were negotiated by appellant does not mean that she produced a positive judgment for Cunningham. The record shows that no settlement was reached while appellant represented Cunningham mainly because of the advice concerning the child support. Based on this record, we hold that the unresolved settlement agreement did not constitute a positive result as contemplated by Litman and Cole.”

In accord is the more recent decision of the Second District Court of Appeal, in LaVere-Alvaro v. Syprett, Meshad, Resnick, Lieb, Dumbaugh, Jones, Krotec & Westheimer, P.A., 54 So. 3d 1056, 1057-58 (Fla. 2d DCA 2011). In that divorce case the trial court awarded wife’s predecessor counsel a charging lien, but the appellate court reversed, stating:

“Donna LaVere-Alvaro appeals a judgment imposing a charging lien in favor of her former counsel, Syprett, Meshad, Resnick, Lieb, Dumbaugh, Jones, Krotec & Westheimer, P.A. (Syprett), for attorney’s fees and costs incurred during its representation of LaVere-Alvaro in a dissolution of marriage action. The judgment also awarded Syprett a retaining lien on all of LaVere-Alvaro’s property in its possession. We find the trial court erred by entering the charging lien because it failed to determine whether Syprett provided services that produced a positive judgment or settlement for LaVere-Alvaro. Likewise, the entry of the retaining lien was premature because LaVere-Alvaro’s ownership interest in the property that Syprett sought to retain had not yet been established. Accordingly, we reverse the judgment and remand for further proceedings. We affirm the remainder of LaVere-Alvaro’s issues without discussion.”

“The charging lien is an equitable right to have costs and fees due an attorney for services in the suit secured to him in the judgment or recovery in that particular suit.” Sinclair, Louis, Siegel, Heath, Nussbaum & Zavertnik, P.A. v. Baucom, 428 So. 2d 1383, 1384 (Fla. 1983). In this instance, the trial court summarily determined that LaVere-Alvaro was obligated to pay for all services rendered by Syprett pursuant to a retainer agreement previously entered into by the parties. Yet, “‘[i]t is not enough to support the imposition of a charging lien that an attorney has provided his services; the services must, in addition, produce a positive judgment or settlement for the client, since the lien will attach only to the tangible fruits of the services.’” Mitchell v. Coleman, 868 So. 2d 639, 641 (Fla. 2d DCA 2004) (quoting Correa v. Christensen, 780 So. 2d 220, 220 (Fla. 5th DCA 2001)). Because the trial court failed to find that Syprett’s services benefitted LaVere-Alvaro, we find the trial court erred by imposing the charging lien.10

Under the above cases, there is a good argument that the services of an accountant expert witness do not “produce a positive judgment or settlement for the client,” as required by LaVere-Alvaro; Mitchell v. Coleman, 868 So. 2d 639, 641 (Fla. 2d DCA 2004); and Correa v. Christensen, 780 So. 2d 220, 220 (Fla. 5th DCA 2001). The accountant’s work as an expert witness is typically completed on the giving of his or her testimony at trial, at which point the case is necessarily still pending and unresolved. This is analogous to an attorney who is discharged before any settlement was reached and before any final judgment entered, such that under Rochlin, the client can argue that any lien motion filed by an accountant must be denied.

Even if we ignore the fact that chronologically, the accountant’s work as part of a litigant’s “team” is done before any particular “result” has been obtained, much like an initial lawyer who is fired before obtaining a judgment or settlement, the “obtaining a result for the client” requirement for charging liens still poses other problems, for an accountant claiming that she can assert a charging lien in order for her to secure payment for work done in a lawsuit. If the accountant is claiming her work was the causative factor in obtaining a judgment, has she not also made the case that she has necessarily committed the offense of the unauthorized practice of law? Outside the rarified air of specialized tax courts, accountants are not allowed to pass themselves off nor hold themselves out as a client’s representative who has been hired to “obtain a result” from a court.11

At any rate, it should not be the client’s burden to disprove an accountant’s claimed right to assert a retaining or charging lien. It is hornbook law that a movant has the burden of showing entitlement to the relief requested.12 While this rule has been stated most often respecting summary judgment motions,13 the rule, that the burden of showing entitlement to the relief requested is on the movant, applies to all motions.14

Under this most basic rule of motion practice, the client has a good argument that unless the accountant can provide Florida caselaw authority showing that accountants may assert charging or retaining liens, such claims must fail, because there are no such Florida cases. As previously noted, what the cases instead say is that “[t]he charging lien is an equitable right to have costs and fees due an attorney for services in the suit secured to him in the judgment or recovery in that particular suit.”15 As a result, any motion filed by an accountant asserting a charging or retaining lien is subject to being stricken, as legal insufficiencies in motions and papers are reached by a motion to strike.16

In addition to the fact that an accountant will be unable to cite Florida law showing her right to a charging or retaining lien, if research is broadened to a national scale, we find quite the opposite. Attorneys, rightly or wrongly, have a special place in the law, when it comes to recovery of professional fees. The author of the foregoing article specifically states:17

“In contrast to the ability of lawyers to assert liens, most other professionals can assert neither retaining liens nor charging liens. While accountants have ownership rights in their own worksheets, internal memoranda, and the like, and, thus, can withhold such papers from the client, they may not withhold any documents furnished by the client nor any final work product such as a tax return or audit. They have no lien by virtue of common law, nor has [sic] the power to assert a lien conferred by legislation. A manual published for accountants states in a boldface sidebar: Never Withhold Client Records. The manual cites cases involving disciplinary action against accountants for attempting to withhold their work product as leverage to obtain their fees.”

As noted above, not only are accountants not entitled to attorneys charging and retaining liens, it has repeatedly been held that asserting a retaining lien, in fact, violates an accountant’s ethical duties to his or her client. Florida law is in accord, and Florida courts granting such attorneys’ remedies to nonattorneys will be reversed on appeal:

“The wife hired accountant Emanuel Gerstein to do work for her in this dissolution action. At the time the wife filed her motion, Gerstein was withholding documents from the wife because she failed to pay him. The trial court denied the wife’s motion to compel because the wife ‘executed a contract that specifically said that [Gerstein] had the right to a retaining lien on all…documents…delivered to his firm by [the wife]…until such time as full payment has been made.’ Despite the ‘retaining lien’ language in the contract, we find that the trial court erred in denying the wife’s motion to compel return of her financial papers from Gerstein. The parties provided no statute or case authority directly on point. The closest statute cited, [F.S. §]473.318 (1999), allows an accountant to retain his or her own papers ‘except for records which are part of the client’s records.’ Section 473.318 speaks to the issue of the accountant’s papers but does not address whether an accountant may exercise a retaining lien over the client’s own records.”

“While no statute expressly allows accountants to assert a retaining lien, Florida Administrative Code Rule 61H1-23.002 precludes them from doing so. The rule requires an accountant to furnish to a client or to a former client, within a reasonable time after being asked, any documents or records of the client’s which are in the accountant’s possession. Subsection (2) of the rule provides that “[a] licensee shall not withhold those items contemplated above under any circumstances following a demand for same from the client.” The rule contains no exception in the event the client agrees in writing to allow the accountant a retaining lien on the client’s records. Violation of the rule could result in the accountant’s suspension until the records are returned. See [F.A.C.] R. 61H1-36.004(2)(h)4. Thus, we find that the trial court erred in failing to grant the wife’s motion to compel Gerstein to return all of the papers that she had provided in furtherance of their contract for forensic accounting services.”18

The above remains the law applicable to Florida accountants, the applicable portion of the current version of the rule stating:

“61H1-23.002 Records Disposition Responsibility.

“(1) A certified public accountant shall furnish to a client or former client upon request and reasonable notice:

“(a) Any accounting or other records belonging to, or obtained from or on behalf of, the client that were provided to the certified public accountant; the certified public accountant may make and retain copies of such documents of the client when they form the basis for work done by the certified public accountant.

“(b) Any accounting or other records that the certified public accountant was not specifically engaged to prepare that are related to an issued work product of the certified public accountant and that are not in the client’s books and records or are otherwise not available to the client, with the result that the client’s financial information is complete.

“(c) A copy of any deliverable as set forth in the terms of the engagement that has been issued by the certified public accountant.”19

In discussing this issue with colleagues, it was suggested that there might be some other creative options for ensuring the recovery of CPA fees, if not through a charging lien awarded to the accountant as lienor. One suggestion was a “stipulated judgment lien, signed by the client, that addresses both fees and costs.” If this has been done in Florida with accountants as lienors, there is no reflection of it in reported appellate caselaw. Query whether such a contractual substitute for a charging lien might run afoul of the rule that parties in legal proceedings may not do indirectly what they are prohibited from doing directly.20 In addition to being a remedy with uncertain boundaries, this seems like a solution in search of a problem. If accountant expert witnesses begin entering into contractual judgment liens with clients, then might not other experts and service providers (court reporters immediately spring to mind) also want to contractually secure payment of their bills with a proverbial “piece of the action?” The spectre of post-judgment proceedings with numerous competing lienholders all proceeding against the divorcing parties (and each other) does not paint a particularly attractive picture, especially given that under the current typical scenario, there is already the possibility of present and former counsel duking-it-out with competing charging and retaining lien claims.21

That said, another suggestion made was that the lawyers could pay “their own expert costs and then properly include them in an authorized charging lien.” This article was not meant to negate such a possibility. In fact, as previously noted in the cases defining charging liens, such liens include “costs and fees.”22 The point, however, is that the remedy belongs to the attorney. The decision to incur expert fees on behalf of the client, so that they might be included in a charging lien, is the attorney’s. The accountant cannot be the lienor.

In our experience, it is rare that an accountant will attempt to assert a charging lien or a retaining lien to secure payment for services rendered in connection with litigation, at least in family law cases. If such a claim should be raised, however, there are numerous reasons why it should fail. First, the burden should be on the accountant, as purported lienor, to show his or her right to assert such a lien under Florida law, and there do not appear to be any such Florida cases. Florida cases defining these two liens and their elements repeatedly describe the lienor as an attorney, and under the rule of exclusio unius, such cases impliedly forbid nonlawyers from asserting such liens.

Further, as expert witnesses testifying in the case, it can be asserted that the accountant is not the person who has obtained the result for the client, as the accountant’s work is finished before any judgment or settlement is reached. At any rate, accountants may not practice law anyhow, and it is the party’s legal representative, not any particular witness, who ultimately obtains the result from the court.

Finally, caselaw from outside Florida specifically refutes accountants’ claims to be able to assert such liens, which are only available to attorneys at law. As to retaining liens, Florida administrative regulations specifically prohibit accountants from asserting such liens as an ethical matter. Accountants are not attorneys, and placing a milking stool behind a horse does not make it a cow.

1 Emphasis added.

2 Rebecca J. Covey, P.A. v. American Import Car Sales, 944 So. 2d 1202, 1204 (Fla. 4th DCA 2006) (emphasis supplied) (citing Daniel Mones, P.A. v. Smith, 486 So. 2d 559, 561 (Fla. 1986)).

3 Wedgewood Air Conditioning, 801 So. 2d at 129 (citations omitted).

4 Young v. Progressive Ins. Co., 753 So. 2d 80 (Fla. 2000).

5 St. John v. Coisman, 799 So. 2d 1110 (Fla. 5th DCA 2001).

6 Id.; Prewitt Mgmt. Corp. v. Nikolits, 795 So. 2d 1001 (Fla. 4th DCA 2001); Lowe v. Broward Co., 766 So. 2d 1199 (Fla. 4th DCA 2000).

7 Cunningham, 739 So. 2d at 1216.

8 Id.

9 Id. at 1217.

10 Emphasis supplied.

11 See generally Matthew A. Melone, Income Tax Practice and Certified Public Accountants: The Case for a Status Based Exemption From Unauthorized Practice of Law Rules, 11 Akron Tax J. 47, 78-98 (1995) (arguing the historical role of the certified public accountant in the tax return process provides ample evidence that an unfettered role in tax practice is justified).

12 See, e.g., Calarese v. Weissfisch, 87 So. 3d 1225 (Fla. 3d DCA 2012) (burden on movant for summary judgment to show no disputed facts and entitlement to judgment as a matter of law); Skaf’s Jewelers, Inc. v. Antwerp Import Corp., 150 So. 2d 260 (Fla. 2d DCA 1963) (same).

13 Cunningham, 739 So. 2d at 1217.

14 C.f., Birdsall Shipping, S.A. v. Gallardo, 390 So. 2d 437 (Fla. 3d DCA 1980) (movant failed to carry its burden to show residency of its codefendant, as required to establish its entitlement to change of venue).

15 Rudd v. Rudd, 960 So. 2d 885, 887 (Fla. 4th DCA 2007) (emphasis added, quoting Cole v. Kehoe, 710 So. 2d 705, 706 (Fla. 4th DCA 1998)).

16 See, e.g., Smiles v. Young, 271 So. 2d 798 (Fla. 3d DCA 1973) (motion to strike was directed to legal sufficiency of opponent’s motion for relief from judgment); Worley v. Sheffield, 538 So. 2d 91, 92 (Fla. 1st DCA 1989) (reversing granting of summary judgment and noting that motion had been subject of motion to strike); Nationsbank, N.A. v. Ziner, 726 So. 2d 364 (Fla. 4th DCA 1999) (fact that defendant did not appeal denial of motion to strike plaintiff’s motion for summary judgment did not preclude court from later reconsideration of its order).

17 See generally Joseph M. Perillo, The Law of Lawyers’ Contracts Is Different, 67 Fordham L. Rev. 470-71 (1998) (“Lawyers’ Contracts” hereinafter) (footnotes omitted, emphasis by small capitals in original, other emphasis and bracketed matter).

18 Blum v. Blum, 769 So. 2d 1142, 1143 (Fla. 4th DCA 2000) (emphasis added).

19 F.A.C.R. §61H1-23.002(1) (as amended, effective Dec. 12, 2015).

20 See, e.g., Clermont-Minneola Country Club v. Loblaw, 143 So. 129 (1932); Johns v. Bowden, 66 So. 155 (1914).

21 C.f., Leiby Taylor Stearns Linkhorst and Roberts, P.A. v. Wedgewood Air Conditioning, Inc., 801 So. 2d 127 (Fla. 4th DCA 2001) (charging lien filed by law firm retained to serve as co-counsel was superior to retaining lien of firm originally retained by client and related back and attached to proceeds paid to original firm pursuant to settlement agreement; original firm failed to file charging lien and its reliance upon passive retaining lien to establish its claim against settlement proceeds would have denied law firm that participated in the creation of funds payment for services).

22 Litman v. Fine, Jacobson, Schwartz, Nash, Block & England, P.A., 517 So. 2d 88, 91 (Fla. 3d DCA 1987) (emphasis added), rev. den., 525 So. 2d 879 (Fla. 1988).

Luis E. Insignares is board certified in marital and family law. He practices in all areas of complex marital and family law at the trial and appellate levels in Ft. Myers and Naples. He is also a frequent author and lecturer.

Brian J. Kruger practices with Luis E. Insignares, P.A., in Ft. Myers and Naples, specializing in marital and family law at the trial and appellate levels. He is a graduate of the University of Florida Levin College of Law where he served as a legal research and writing instructor.

This column is submitted on behalf of the Family Law Section, Nicole L. Goetz, chair, and David Hirschberg and Heather Apicella, editors.

Family Law