Car / Auto Accident Lawyer
If an attorney was representing you in this case, you should call them immediately to determine why the lien was not paid.
Nothing in this communication should be construed as creating an attorney client relationship. This is for informational purposes only. Attorney will take no action on your behalf unless and until a written retainer agreement is signed. There are strict time deadlines on filing claims and, as such, you are advised to consult with and retain an attorney immediately to file such claims timely or you will lose any right to recovery.
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Car / Auto Accident Lawyer
potential problems range from personal liability for the funds that a lienholder is claiming all the way to State Bar disciplinary action.
If follows that knowing how to deal appropriately with lienholders is serious business.
Lien and Lienholder Basics
Lawyers frequently receive and hold funds that are subject to third party liens. A "lien" is simply a claim of a right to funds that might be received in the future. A "lienholder" is the holder of that lien right. Recognizing Liens
When taking a new case, it is fundamental that the attorney must identify any potential lien claimants and analyze the potential impact any lien claim might have upon recovery. Identifying potential liens requires interviewing the client to determine what if any benefits might have been paid by a lienholder and reviewing medical records.
The simplest liens to identify in a file are contractual liens, such as medical provider, hospital or attorney liens. These will generally appear in written form and should be kept in a separate folder with the client's file. A. The Attorney Owes A Duty To The Lienholder
"(A)n attorney on notice of a third party's contractual right to funds received on behalf of his client disburses those funds at his own risk." Kaiser Found. Health Plan, Inc. v. Aguiluz, 47 Cal.App.4th 302, 304, 54 Cal.Rptr.2d 665 (1996).
Once an attorney receives notice of a lien, he or she is held to a fiduciary obligation with respect to the funds. Matter of Respondent P, 2 Cal.State Bar Ct.Rptr. 622, 632 (Rev.Dept. 1993).
Even so, an attorney receiving settlement proceeds or other funds is not generally obligated to satisfy non-lien client debts out of that money. Farmers Ins. Exch. v. Zerin, 53 Cal.App.4th 445, 459, 61 Cal.Rptr.2d 707 (1997).
Since the attorney owes a dual duty to both lienholder and client, it is important to be proactive in negotiating with and transferring funds to lienholders.
B. Negotiable Liens
It is always best to negotiate with a lienholder prior to a case settling. You and your client have maximum leverage when payment is only a prospect and you can argue persuasively that a lienholder's flexibility will be key in getting everyone, including the lienholder, paid.
As a general rule, contractual liens provide the most flexibility in negotiation. Many offices routinely contact all medical care providers following a settlement asking for a reduction in the lien claims. Often, such reductions are granted as a matter of course.
Whether an attorney with a lien claim will be amenable to negotiating a lien is often a significant issue in resolving a case. The best practice when a prior attorney has handled a case is to inquire early on what the fee and cost expectation is should the matter settle. Sometimes there is bad blood between client and former attorney that further complicates the negotiation process. An agreement pre-settlement is the optimum course. Non-Negotiable Liens
Where a county has the right of subrogation for the reasonable value of any hospital, medical or dental care furnished to an injured person, the court is not empowered to reduce the lien amount. City & County of San Francisco v. Sweet, 12 Cal.4th 105, 116-117, 48 Cal.Rptr.2d 42 (1995); Government Code section 23004.1. The county may compromise, settle or waive all or part of its lien claim either for the convenience of the county or if collection would result in undue hardship. However, many county governments are rigid in this regard.
Children's Services Program liens likewise cannot be reduced by the court. See, Tapia v. Pohlmann, 68 Cal.App.4th 1126, 1130-1134, 81 Cal.Rptr.2d 1.
Even so, if your client is facing a special hardship, this may be grounds for the county or State to consider reducing or waiving the lien
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