Stover v. County of Lancaster, 271 Neb 107(March 3, 2006), announces the Nebraska Supreme Court new ruling about the duties of the clerks of courts. The ruling applies when an adverse party pays into the clerk of the district court sums to satisfy a judgment awarded against that party, and when, prior to the payment, the clerk, who has notice of the lien by virtue of its filing, has a duty to retain the portion of the deposited funby the lien until the rightful owner can be determined.
In Stover, an attorney was retained in a dissolution action filed. On September 25, 2001, Judgment in the amount of $5,000 was entered, in favor of husband and against his wife.
On November 7, 2001, Stover, the attorney, filed a pleading entitled “Lien” in the Denison case. Stover claimed a $2500 “lien for professional services rendered” during her representation of husband in the Denison case. A copy of the lien was mailed to all parties and filed with the court, so the clerk, and the parties had notice of Stover’s attorney’s lien.
On April 19, 2002, wife paid the sum of $5,153.57 into the district court clerk’s office. The clerk did not advise Stover the wife paid the judgment and did not retain any funds relative to Stover’s lien. On June 17, 2002, Stover submitted a claim to the Lancaster County Board of Commissioners for the money under the Court Tort Claims Act. The Board held a hearing, and denied the claim on August 14, 2002.
On January 23, 2003, Stover filed a suit alleging the clerk erred when she disbursed the sum paid by wife to husband in derogation of Stover’s attorney’s lien. On February 9, 2004, the county court ruled in favor of Lancaster County and dismissed Stover’s complaint.
Stover appealed the county court’s decision to the district court for Lancaster County. The district court affirmed the county court’s ruling. The Supreme Court reversed, holding for the attorney.
The Supreme Court founded its Opinion on Neb Rev Stat § 7-108, providing an attorney has a lien upon “money…in the hands of the adverse party…belonging to the attorney’s client from the time the attorney gives notice of the lien. Section 7-108 creates a charging lien and such lien ‘is not perfected until notice has been given to the party in position of the fund.’”
The Court concluded § 25-2214.01 “obligates the clerk of the district court to ‘carefully manage’ money received and pay out monies to the ‘rightful owner.’” The Court also concluded § 25-2214.01 anticipates the money be placed in an interest-bearing account when the true-owner cannot be determined.
The Nebraska High Court’s New Ruling on Attorney’s Liens Holds: "When an adverse party pays into the clerk of the district court such sums as would satisfy a judgment awarded against that party, and prior to the payment of such sums and to the court, notice is given and an attorney’s lien is attached, the district court clerk who has notice of the lien by virtue of its filing has a duty to retain that portion of the deposited funds to which an attorney’s lien has attached until the “rightful owner” of the sums retained can be determined…. [T]he clerk of the district court should notify those entities of whom the clerk is on notice who have claimed an interest in the funds, the retention of the funds, to effectuate the determination of the ‘rightful owner.’”
March 9, 2006
Claudia L. Stringfield-Johnson, Esq.
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