On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County.
Michels, Havey and Conley. The opinion of the court was delivered by Michels, P.J.A.D.
We granted intervenor Messrs. Landi & Kessler, the law firm formerly representing plaintiff Stephen Frenkel, leave to appeal from an order of the Chancery Division, Family Part, that in part, compelled it to turn over photocopies of plaintiff's file to Messrs. Blaustein & Wasserman, plaintiff's present attorneys in this matrimonial action. Landi & Kessler refused to turn over the photocopies of the file, contending that it was entitled to retain the file under an attorney's common law retaining lien until the balance of its fees had been paid by plaintiff.
Briefly, plaintiff retained Landi & Kessler to represent him in this matrimonial action. While the action was pending, plaintiff filed a bankruptcy petition with the Federal Bankruptcy Court, naming Landi & Kessler as one of his creditors. However, Landi & Kessler was not advised that a bankruptcy petition had been filed and continued to represent plaintiff. Sometime thereafter, Landi & Kessler was advised that plaintiff had retained Blaustein & Wasserman to represent him. Blaustein & Wasserman requested that Landi & Kessler turn over plaintiff's file and execute a substitution of attorney in its favor. At that time, plaintiff owed Landi & Kessler in excess of $5,000 for legal services performed in this matter, and, therefore, refused to execute the substitution of attorney or to turn over the file until its bill for legal services was paid. Landi & Kessler asserted its attorney's common law retaining lien and a lien under the New Jersey Attorney's Lien Act, N.J.S.A. 2A:13-5,
and moved to be relieved as counsel for plaintiff. Plaintiff immediately filed a cross-motion to compel Landi & Kessler to turn over the original file or a photocopy thereof. Following a hearing, the trial court relieved Landi & Kessler as attorneys for plaintiff and ordered it to turn over a photocopy of the file to Blaustein & Wasserman. The cost of photocopying the file was to be paid by plaintiff.
On appeal, Landi & Kessler contends that since plaintiff's bankruptcy petition was pending in the Bankruptcy Court, the State court did not have jurisdiction to order it to turn over plaintiff's file and that it was entitled to hold the file under its attorney's common law retaining lien. At oral argument, we were informed by counsel that during the pendency of this appeal plaintiff was discharged from bankruptcy and Landi & Kessler's claim for counsel fees was remanded to the State court for resolution. Thus, the only issue remaining before us is whether the trial court properly ordered Landi & Kessler to turn over photocopies of plaintiff's file to Blaustein & Wasserman even though the former's counsel fees had not been fully paid. We are satisfied that it did and, therefore, affirm the order under review.
Under New Jersey law, an attorney has a common law retaining lien which "attaches to all papers, books, documents, securities, moneys, and property of the client which come into the possession of the attorney in the course of, and with reference to, his professional employment." Brauer v. Hotel Associates, Inc., 40 N.J. 415, 419, 192 A.2d 831 (1963); H. & H. Ranch Homes, Inc. v. Smith, 54 N.J. Super. 347, 351-52, 148 A.2d 837 (App.Div.1959); Norrell v. Chasan, 125 N.J. Eq. 230, 234, 4 A.2d 88 (E. & A. 1938); see In re Samuel August & Co., 228 F. Supp. 443, 445 (D.N.J.1964). The attorney's common law retaining lien is a general lien which gives an attorney the right to retain possession of the client's property until the entire balance due for legal services, as well as for costs and disbursements, is paid. However, the attorney's common law retaining
lien, unlike the common law charging lien, is a passive lien which is not enforceable through legal proceedings. Brauer v. Hotel Associates, Inc., supra, 40 N.J. at 419-420, 192 A.2d 831; accord Panarello v. Panarello, 245 N.J. Super. 318, 323, 585 A.2d 428 (Ch.Div.1990). In Brauer v. Hotel Associates, Inc., the Supreme Court explained the difference between the attorney's common law retaining lien and the common law special or charging lien as follows:
The retaining lien is distinguishable from the common-law special or charging lien which an attorney may have for services rendered in a particular cause of action and which attaches to the judgment in the cause for which the services were rendered. Visconti v. M.E.M. Machinery Corp., supra [7 N.J. Super. 271, 73 A.2d 74] [(App.Div.1950)]. The charging lien may be actively enforced and does not rest upon possession. Republic Factors, Inc. v. Carteret Work Uniforms, 24 N.J. 525, 534 [133 A.2d 6] (1957); 7 Am.Jur. 2d, supra, § 281. Its scope was enlarged by N.J.S. 2A:13-5. H. & H. Ranch Homes, Inc. v. Smith, 54 N.J. Super. 347 [148 A.2d 837] (App.Div.1959). It is, however, only the common-law general or retaining lien with which we are herein concerned.
The attorney's retaining lien can only attach to property that comes into the possession of the attorney in the course of, and with respect to, his professional employment. It cannot arise if possession of the property is maintained for a special purpose inconsistent with his claim to a lien. Ideal Tile Corp. v. N.T. Investment Co., 111 N.J. Eq. 241 [162 A. 111] (Ch.1932); Annotation, 2 A.L.R. 1488 (1919); Annotation, 1917D Ann.Cas. 147, 150-151; 7 Am.Jur. 2d, supra, § 275. [40 N.J. at 420, 192 A.2d 831].
The Supreme Court further emphasized that the value or effectiveness of the attorney's common law retaining lien
is not the value of the property itself. . . . Rather, the effectiveness of the lien is proportionate to the inconvenience of the client in being denied access to his property. . . . The focal point is not upon the objective worth of the property, but upon its subjective worth to the client and those who represent him. If the property loses this latter value, the attorney's possession becomes meaningless, and his passive lien, to all effects, worthless. Therefore, it is the inconvenience suffered by the client which determines the value of the lien, and if the client or his representative considers the elimination of this inconvenience to be as valuable as the amount of the attorney's charges, then the client will satisfy the charges, the lien will dissolve, and the client's ...