A client is unhappy, hires someone else, and assumes the old lawyer is a closed chapter. Successor counsel settles the case a year later and a letter arrives from the first firm claiming a piece of the recovery.
That letter is usually right, and the reason is structural. Minnesota’s attorney’s lien attaches to the cause of action itself — not to the fee agreement, not to the check, not to anything the client can revoke. It attaches when the summons is served, and it rides the claim wherever the claim goes.
Here is the part that surprises even lawyers: the cause-of-action lien is one of the few liens in Minnesota that beats a competing creditor without any public filing at all. The Minnesota Supreme Court has held that the notice provision in the attorney’s-lien statute applies only to the other kind of attorney’s lien. On that rule, a firm that files nothing still outranks a judgment creditor who perfected a garnishment lien years later.
What does § 481.13 actually create?
Two different liens, in one sentence, with different rules. Minn. Stat. § 481.13, subd. 1(a):
An attorney has a lien for compensation whether the agreement for compensation is expressed or implied (1) upon the cause of action from the time of the service of the summons in the action, or the commencement of the proceeding, and (2) upon the interest of the attorney’s client in any money or property involved in or affected by any action or proceeding in which the attorney may have been employed, from the commencement of the action or proceeding, and, as against third parties, from the time of filing the notice of the lien claim, as provided in this section.
Clause (1) is the cause-of-action lien. Clause (2) is the property-interest lien. The trailing “as against third parties” language — call it the third-party clause — is what the fight is about, because it decides whether a lawyer must file anything to have priority.
In City of Oronoco v. Fitzpatrick Real Estate, LLC, 883 N.W.2d 592 (Minn. 2016), the Minnesota Supreme Court answered it. A bank had docketed a Florida judgment against the client in Minnesota in 2009 and served a garnishment summons on the judgment proceeds in June 2014. The client’s law firm gave notice of its attorney’s lien days later. The district court ranked the bank first. The supreme court affirmed the court of appeals’ reversal, holding that § 481.13, subd. 1(a), “creates two distinct attorney’s liens: a cause-of-action lien and a property-interest lien,” which “have different notice requirements,” and that the statute “does not require an attorney with a cause-of-action attorney’s lien to file notice of the lien claim for the lien to have priority over third-party claims.”
Three reasons: the third-party clause sits inside clause (2), separated only by a comma; the last-antecedent canon points it at the phrase it follows; and its closing words, “as provided in this section,” refer to subdivision 2, which supplies a perfection procedure only for property-interest liens. The firm’s lien had attached no later than October 2010, when the representation began. The bank’s 2014 garnishment lost.
Then when does a lawyer have to file something?
When the lien is claimed against the client’s property rather than the claim. Subdivision 2 is exacting, and the penalty is total.
For real property, subd. 2(a) requires a notice of intention to claim a lien filed with the county recorder or registrar of titles and noted on the certificate of title. Then: “Within 30 days of filing a lien on real property, the claimant must prepare and deliver a written notice of the filing personally or by certified mail to the owner of the real property or the owner’s authorized agent. A person who fails to provide the required notice shall not have the lien and remedy provided by this section.” On payment in full, the lienholder has 30 days to deliver a recordable satisfaction. And there is an outer limit on getting started at all: “No notice of intent to claim a lien may be filed more than 120 days after the last item of claim.”
For personal property, subd. 2(b) is one sentence: the notice “must be filed in the same manner as provided by law for the filing of a security interest.”
Subdivision 3 then puts a clock on enforcement against real property. No such lien is enforced unless the lienholder “by filing either a complaint or an answer with the court administrator, asserts a lien within one year after the filing of the notice of intention to claim a lien,” unless the owner agrees in a recorded written instrument to a longer period — and “[i]n no event may the lien be asserted more than three years after filing.” Absence of a lis pendens after the period runs is “conclusive evidence that the lien may no longer be enforced as to a bona fide purchaser, mortgagee, or encumbrancer without notice.”
None of that applies to the cause-of-action lien. That asymmetry is the whole point of Oronoco.
If the client fires the lawyer, what does the lawyer get?
The lien survives the firing. What it secures is reasonable value, not the contract fee.
Minnesota has long held that a client may end the relationship at will. As the supreme court restated the rule in In re Distribution of Attorney’s Fees Between Stowman Law Firm, P.A., 870 N.W.2d 755 (Minn. 2015), “a contract for legal representation between an attorney and a client may be cancelled by the client at any time, with or without cause,” and “the discharge of an attorney without cause does not constitute a breach of contract because the right to terminate is an implied term of the contract.” When the client exercises that right, “the measure of relief of the attorney is the reasonable value of his services.”
Stowman itself decided the mirror-image question — what happens when the lawyer leaves — and the answer is much harder on the lawyer:
We conclude that an attorney may withdraw from a contingent-fee agreement with or without cause, provided that the withdrawal satisfies the rules of professional responsibility. But the attorney must establish that the withdrawal is for good cause in order to recover in quantum meruit the reasonable value of the services rendered prior to withdrawal.
The firm in Stowman withdrew from a medical-malpractice contingency after the client refused a $100,000 offer; successor counsel later settled for $200,000; the firm filed an attorney’s lien and got nothing but its costs. The court held that “the refusal of a client to accept a settlement offer in a civil case does not constitute good cause to withdraw,” and described good cause as “narrow in scope,” generally requiring that the client engaged in culpable conduct, the attorney did not, and continued representation would violate the attorney’s ethical obligations.
| Client discharges the lawyer | Lawyer withdraws | |
|---|---|---|
| May it be done? | Yes, at any time, with or without cause | Yes, with or without cause, if consistent with the rules of professional conduct |
| Is it a breach of contract? | No — the right to terminate is an implied term | Not reached — the withdrawing firm in Stowman sought quantum meruit, not contract damages |
| Recovery | Reasonable value of services rendered | Reasonable value only on a showing of good cause |
| Client’s refusal to settle | The client’s call to make | Not good cause |
The lien is the enforcement mechanism for whatever that recovery turns out to be. It is not a determination that the number in the old fee agreement is owed.
How is the lien established — and is that the same thing as collecting it?
No, and the gap between those two is where cases go sideways.
Subdivision 1(c) allows summary establishment without a separate lawsuit: a lien under (a) or (b) “may be established, and the amount of the lien may be determined, summarily by the court under this paragraph on the application of the lien claimant or of any person or party interested in the property subject to the lien,” and “[j]udgment shall be entered under the direction of the court, adjudging the amount due.”
Dorsey & Whitney LLP v. Grossman, 749 N.W.2d 409 (Minn. Ct. App. 2008), explains the mechanics and the limits. The lien created by subd. 1(a) is “an inchoate lien that attaches at the commencement of the legal representation”; “[t]o make the lien choate, an attorney may petition the district court to summarily establish the lien.”
But the 2002 amendment stripped enforcement out of the statute. As Grossman put it, the current statute “authorizes the district court only to summarily establish the lien,” and “[i]t no longer authorizes the district court to enforce the lien in the summary proceeding; rather, it is silent as to the proper forum and means for enforcing the lien.” Establishment is security for a debt; collecting on that security is a separate exercise.
Two practical corollaries from Grossman:
- An attorney’s-lien proceeding does not produce an unqualified personal judgment. The district court must determine the lienholder, the subject of the lien as defined by the statute, and the amount due. The court of appeals reversed a money judgment that named an amount without identifying the property the lien attached to.
- Malpractice is not tried there. Grossman adopts the rule that “[c]onsideration of complex questions of professional negligence in the lien action is contrary to the legislative intent expressed in the language of the statute.” A client with a malpractice claim is not barred from bringing it; the client simply cannot use the summary lien proceeding to litigate it.
Where does the lien rank against everyone else chasing the same settlement?
Very high — and one of Minnesota’s most-cited lien priority rules is written into somebody else’s statute.
Minnesota’s hospital lien, Minn. Stat. § 514.68, gives a hospital a lien on the injured person’s causes of action “subject, however, to any attorney’s lien.” That phrase does real work, and the article on Minnesota hospital and medical provider liens walks the hospital side of the same fight.
Keene v. Stattman, 256 N.W.2d 295 (Minn. 1977), is the decision usually cited for it, and it is routinely described inaccurately. Read the posture precisely: Unity Hospital never filed a hospital lien at all. The Minnesota Supreme Court said so — “Since no hospital lien was filed under Minn.St. 514.68, in the case at hand, that statute only becomes important to show the legislative intent,” through its attorney’s-lien proviso. The court affirmed an order requiring the hospital to bear a pro rata share of the plaintiff’s contingent fee “not only on the grounds that the plaintiff’s attorney had a prior lien for his fees when he commenced the action, as provided in Minn.St. 481.13, but also on equitable grounds” — the hospital “did nothing to assist or establish the fund.” (Keene cites the 1974 numbering; the cause-of-action lien is now subd. 1(a)(1).)
The general-creditor answer is Oronoco: a cause-of-action lien that attached at the start of the representation outranked a garnishment lien perfected years later, with no filing required of the lawyer.
The statute does supply one express subordination, and it belongs to the third kind of lien. Under subd. 1(b), an attorney also has a lien “upon a judgment,” extending “to the amount of the judgment from the time of giving notice of the claim to the judgment debtor” — and “[t]he lien under this paragraph is subordinate to the rights existing between the parties to the action or proceeding.” A judgment lien under (b) therefore takes the judgment as it finds it, setoffs and all.
What can the lien not reach?
The client’s homestead, unless the client waived the exemption.
In Christensen Law Office, PLLC v. Olean, 916 N.W.2d 876 (Minn. App. 2018), a firm established a $20,449.19 attorney’s lien and tried to reach property that included the client’s homestead. Minn. Stat. § 510.05 lists what the homestead exemption does not extend to — a lawful mortgage, valid tax liens or assessments, certain public-program claims, laborers’ and material suppliers’ liens, and “any charge obtained under section 481.13 pursuant to a valid waiver of the homestead exemption.” The court of appeals held that “because Christensen Law did not obtain a waiver of Olean’s homestead exemption, Christensen Law’s attorney lien did not attach to Olean’s homestead property.” The lien was good; the target was not. The same homestead protections that block ordinary judgment creditors block a lawyer without a waiver.
What this means in practice
For a client changing lawyers: the departing firm’s lien on the claim exists whether or not anything was filed, and it does not disappear because the fee agreement was terminated. What is negotiable is the amount, which for a discharged lawyer is the reasonable value of services rendered. Successor counsel will normally want the old firm’s claim quantified before any settlement is disbursed, and the fee-shifting rules that decide who pays fees in a Minnesota case are a separate question from what the lawyer’s own client owes.
For a lawyer: the cause-of-action lien is automatic, but everything else is not. Property-interest liens have a 120-day outer limit on the notice of intent, a 30-day owner-notice requirement whose penalty is loss of the lien, and a one-year assertion deadline with a three-year ceiling. And establishment under subd. 1(c) is not collection.
For anyone else with a claim on the recovery — a lender, a litigation funder, a purchaser of the claim, or a party relying on an assignment — the lawyer’s lien is the one encumbrance a public-records search will not show.
Madgett Law, LLC handles attorney’s-lien disputes on both sides — establishing and quantifying liens under Minn. Stat. § 481.13, subd. 1(c), defending clients and successor counsel against overstated fee claims, and sorting out priority when a settlement fund is claimed by lawyers, medical providers, and judgment creditors at the same time. To discuss a Minnesota fee or lien dispute, Send us a message or call 612-470-6529.
Sources: Minn. Stat. § 481.13, subd. 1(a) (two liens: on the cause of action from service of the summons or commencement of the proceeding, and on the client’s interest in money or property, the latter “as against third parties, from the time of filing the notice of the lien claim”), subd. 1(b) (lien upon a judgment from the time of giving notice to the judgment debtor; subordinate to the rights existing between the parties to the action or proceeding), subd. 1(c) (lien established and amount determined summarily on application; judgment entered adjudging the amount due), subd. 2(a) (real property: notice of intention filed with the county recorder or registrar; written notice to the owner within 30 days, failure of which means no lien or remedy; recordable satisfaction within 30 days of payment in full; no notice of intent filed more than 120 days after the last item of claim), subd. 2(b) (personal property: notice filed as a security interest is filed), subd. 3 (real property lien must be asserted by complaint or answer within one year of filing the notice of intention, extendable only by recorded written agreement of the owner, and in no event more than three years after filing; absence of a lis pendens after the period is conclusive as to a bona fide purchaser, mortgagee, or encumbrancer without notice). § 510.05 (homestead exemption does not extend to a charge obtained under § 481.13 pursuant to a valid waiver of the homestead exemption). § 514.68 (hospital lien on the injured person’s causes of action, “subject, however, to any attorney’s lien”). Case law: City of Oronoco v. Fitzpatrick Real Estate, LLC, 883 N.W.2d 592 (Minn. 2016) (§ 481.13, subd. 1(a) creates two distinct liens with different notice requirements; the third-party clause does not require an attorney with a cause-of-action lien to file notice for the lien to have priority over third-party claims; cause-of-action lien held superior to an earlier-perfected garnishment lien); In re Distribution of Attorney’s Fees Between Stowman Law Firm, P.A., 870 N.W.2d 755 (Minn. 2015) (a client may cancel a representation contract at any time with or without cause, discharge without cause is not a breach, and the attorney’s measure of relief is the reasonable value of services; an attorney who withdraws must establish good cause to recover in quantum meruit; a client’s refusal to accept a settlement offer is not good cause); Dorsey & Whitney LLP v. Grossman, 749 N.W.2d 409 (Minn. Ct. App. 2008) (the subd. 1(a) lien is inchoate and attaches at the commencement of the representation; summary petition under subd. 1(c) makes it choate; after the 2002 amendment the statute authorizes only establishment, not enforcement, in the summary proceeding; the court must determine the lienholder, the subject of the lien, and the amount due, and may not enter an unqualified personal judgment; professional-negligence claims are not litigated in the summary lien proceeding); Christensen Law Office, PLLC v. Olean, 916 N.W.2d 876 (Minn. App. 2018) (an attorney lien does not attach to the client’s homestead absent a valid waiver of the homestead exemption under § 510.05); Keene v. Stattman, 256 N.W.2d 295 (Minn. 1977) (no hospital lien had been filed under § 514.68, which mattered “only … to show the legislative intent”; the hospital was required to bear a pro rata share of the contingent fee on the ground that the attorney had a prior lien under Minn. St. § 481.13 and on equitable grounds). This article is general legal information about Minnesota law. It is not legal advice, it does not create an attorney–client relationship, and it does not promise or imply any particular outcome.