## Facts

- North Valley Bank loaned $100,000 to BLR Construction Company, LLC and took a security interest in BLR’s accounts receivable and proceeds, which it perfected by filing a UCC-1.
- BLR performed work for Custom Landscapes of Colorado, Inc. on a state-financed project and issued an unpaid invoice for $53,145.
- BLR retained McGloin, Davenport, Severson & Snow, P.C. to collect the debt; the firm sued and filed notice of an attorney’s lien under Colo. Rev. Stat. § 12-5-119 against any award BLR might obtain.
- During the collection litigation, the bank notified the firm of its perfected security interest in any recovery.
- BLR obtained a judgment against the State of Colorado for $51,402, and the State tendered the funds directly to the firm.
- The firm disbursed the proceeds by retaining $41,381 for fees, holding $3,000 as a retainer for possible future services, and remitting $7,021 to BLR.
- The bank sued the firm for conversion and sought declaratory relief and replevin, asserting entitlement to the judgment proceeds based on its perfected security interest.
- The trial court ruled for the firm, concluding the statutory attorney’s lien had priority over the bank’s security interest and rejecting the bank’s UCC-based priority arguments.

## Issues

1. Whether an attorney’s statutory lien on a judgment under Colo. Rev. Stat. § 12-5-119 takes priority over a previously perfected Article 9 security interest in the same judgment proceeds.
2. Whether Colorado’s version of UCC Article 9, including § 4-9-333, governs and controls the priority contest between the bank’s perfected security interest and the attorney’s lien.
3. Whether the bank was entitled to recover the judgment proceeds from the law firm notwithstanding the firm’s assertion of an attorney’s lien for fees.

## Decision

- The Colorado Court of Appeals affirmed the judgment for the law firm.
- The court held the attorney’s lien on the judgment under § 12-5-119 had priority over the bank’s previously perfected security interest.
- The court rejected the bank’s reliance on UCC Article 9 (including § 4-9-333), concluding the UCC did not govern the statutory attorney’s lien and could not be used to set priority between the lien and the perfected security interest.

## Legal Principles

- Under Colo. Rev. Stat. § 12-5-119, an attorney has a lien on a judgment obtained for a client, and the statute designates that lien as a “first lien” for fees due or to become due for services in the action producing the judgment.
- A statutory attorney’s lien under § 12-5-119 is not a consensual security interest created by contract; it is outside Article 9’s scope.
- Because Article 9 does not govern the attorney’s lien, UCC priority provisions (including § 4-9-333) do not determine priority between the statutory attorney’s lien and a perfected security interest in the same judgment proceeds.
- When a statute expressly grants an attorney’s judgment lien “first” status, that statutory priority controls over competing interests asserted under Article 9.

## Conclusion

The court held that a Colorado attorney’s statutory “first lien” on a judgment under § 12-5-119 takes priority over a lender’s previously perfected Article 9 security interest in the judgment proceeds, and that UCC Article 9 priority rules do not control the lien’s priority.


N. Valley Bank v. McGloin, Davenport, Severson & Snow, P.C., 251 P.3d 1250 (Colo. App. 2010)