Attorney Charging Lien Subordinated to Interest of Preserving Funds for Children’s Education

Sauro v. Sauro, 425 N.J. Super. 555 (App. Div. 2012).  This contentious divorce action boiled down to the complaint of a large law firm that an equitable distribution award was improper because, in making that award, the Family Part improperly elevated the interests of the divorcing couple’s children in having money available for their college education above the law firm’s charging lien.  Though the two parents had agreed on virtually nothing else in that lengthy litigation, both parents, acting pro se in the Appellate Division, contended that the Family Part had acted rightly.  The panel, speaking through Judge Fuentes, agreed.

The facts were convoluted and somewhat distasteful.  Both parents had seen their respective counsel move to be relieved and assert charging liens.  Ultimately, when an equitable distribution award was made, the Family Part used $200,000 of  that award to create “The Sauro Children College Trust Account.”  Those monies were not subject to the complaining law firm’s charging lien.

Judge Fuentes noted that the standard of appellate review of the Family Part’s division of marital assets is narrow.  The Family Part has broad discretion in that regard, and has statutory authority, pursuant to N.J. S.A. 2A:34-23, to make appropriate provisions for the “care, custody, education and maintenance of the children.”     

The panel found that the Family Part’s decision to set up a college fund for the children “was properly supported by the record, well within the court’s authority, and in keeping with the court’s obligation to act in the best interest of the children.  [The law firm’s] contractual rights, as reflected in the retainer agreement with plaintiff, do not abrogate or limit the Family Part’s overriding obligation to act in the best interest of the children in this case.”

The opinion contains a useful discussion of attorneys’ liens, a subject that is not often addressed in published opinions.  But the bottom line is that the Family Part’s equitable powers and duties can override contractual rights in appropriate circumstances.