The trial court concluded that the attorneys had adequately perfected their attorney lien and disbursed money to them based on that lien.

Advanced Pre-Settlement Funding appealed to the Supreme Court of Nevada. It argued among other things that the attorneys had failed to properly perfect their lien because they had not served notice of their lien until after the settlement proceeds had been received and, therefore, the trial court had erred in concluding that the attorney lien had priority over other claims.

For their part, the attorneys argued that the proceeds had not yet been “recovered” within the meaning of Nevada law when they provided notice because the funds had been deposited directly with the court clerk and had not been disbursed.

The Nevada Supreme Court's Decision

The Supreme Court of Nevada affirmed.

In its decision, the court explained that perfecting an attorney lien requires an attorney to serve notice “in writing, in person or by certified mail, return receipt requested.” NRS 18.015(3). The lien attaches to any money or property that “is recovered” on account of the suit “from the time of service of the notices.” NRS 18.015(4).

The court added that an attorney cannot wait until “after settlement is reached and the proceeds have been received” to perfect his or her lien.

Here, the court explained, the attorneys served notice of their lien by certified mail, return receipt requested, on August 18, 2017, more than one year after the insurance company had deposited the settlement proceeds with the trial court clerk on May 31, 2016.

The court then ruled that the funds had not yet been “recovered” when the insurance company deposited the proceeds with the court clerk on May 31, 2016 because they had “not been distributed to any party.”

Accordingly, the court concluded, the trial court had not erred in determining that the attorneys had adequately perfected their lien.

The case is Advanced Pre-Settlement Funding LLC v. Gazda & Tadayon, No. 74802 (Nev. March 28, 2019).