1977-05.

• Court: Indiana

Indiana Ethics Opinion 1977. 1977-05. Opinion No. 05 of 1977INDIANA STATE BAR ASSOCIATION LEGAL ETHICS SUBCOMMITTEEOPINION NO. 5 of 1977We have been asked to review Indiana Opinions No. 1 of 1966 and No. 2 of 1966 in light of certain American Bar Association Ethics Opinions, the Code of Professional Responsibility, and other developments. In relevant part, Indiana Opinion No. 1 of 1966 held that, where an attorney is reasonably satisfied that he has a line for fees, he may ethically hold the file of a client as security for the payments of his fees. In relevant part, Indiana Opinion No. 2 of 1966 held that an attorney's right to compensation for services performed is one which ethically requires other attorneys to refrain from intervening in a cause until such time as the previous lawyer has been fully paid. This Subcommittee's review of these two existing Indiana Opinions will be dealt with separately in this Opinion. REVIEW OF INDIANA OPINION NO. 1 of 1966 Whether or not an attorney may ethically hold the file of a client as security for the payment of his fees is a question which involves the subject of attorneys' liens. In Indiana, both the legislature and the judiciary have recognized and dealt with attorneys' liens. Under Indiana Code § 33-1-3-1, a statutory lien is provided which gives an attorney the right to file a lien if his services procure a judgment, decree or award. Although this lien exists, in proper circumstances, a client may bring a contempt action against an attorney who refuses to turn over money and papers to the person from whom or for whom the attorney has received them. (Indiana Code § 34-1-60-10). The Indiana Supreme Court has declared that in addition to the statutory attorneys' liens on judgments, decrees and awards, attorneys have a common law equitable line on funds generated through the attorney's actions. State v. Hendricks Circuit Court, (1962), 243 Ind. 134, 183 N.E. 2d 331. In its decision, the Indiana Supreme Court quoted with approval 7 C.J.S., Attorney and Client, § 210, p. 1141, which asserts that attorneys have a "retaining lien" on the client's documents and other properties which come into the hands of the attorney professionally, until the attorney is paid for his services. As the Subcommittee is precluded from rendering opinions on questions of law, the Subcommittee...