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Appeals for the Fifth Circuit concluded that under Alabama State
law (the applicable law in Cotnam) the contingent fee arrangement
operated to assign to the attorneys an equitable lien and
interest as to 40 percent of the judgment. As stated in the
provision of the Alabama Code relied upon by the Court of
Appeals:
2. Upon suits, judgments, and decrees for money,
* * * [attorneys] shall have a lien superior to all
liens but tax liens, and no person shall be at liberty
to satisfy said suit, judgment or decree, until the
lien or claim of the attorney for his fees is fully
satisfied; and attorneys at law shall have the same
right and power over said suits, judgments and decrees,
to enforce their liens, as their clients had or may
have for the amount due thereon to them.
Cotnam v. Commissioner, supra at 125 n.5 (quoting 46 Ala. Code
sec. 64 (1940)).
The parties here agree that Missouri law is the applicable
law in this case. Petitioner argues that the Missouri statute
regarding attorney liens is similar to that of the Alabama
statute quoted above, and therefore Cotnam is applicable here.
We disagree. In the present case, the applicable Missouri
statute provides as follows:
The compensation of an attorney or counselor for
his services is governed by agreement, express or
implied, which is not restrained by law. From the
commencement of an action or the service of an answer
containing a counterclaim, the attorney who appears for
a party has a lien upon his client’s cause of action or
counterclaim, which attaches to a verdict, report,
decision or judgment in his client’s favor, and the
proceeds thereof in whosesoever hands they may come;
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