Court of Appeals affirms which attorneys can claim liens after a foreclosure

Only lawyers on the winning side of a foreclosure action can claim surplus funds from a sheriff’s sale, the Court of Appeals affirmed in an opinion issued Thursday.

The Chicago-based Law Offices of Robert J. Ralis had asserted an attorney lien and petitioned for a surplus of more than $25,000 from the sheriff’s sale of real property in Michigan City, Indiana, according to the appellate court’s opinion.

Daniel Nicolosi held a mortgage on the property, and a trial court had entered a foreclosure judgement in his favor in 2024. The judgment was against several parties, including North Side Ventures LLC., which the Ralis firm represented in some non-foreclosure related business.

The foreclosed property sold for more than $1.2 million the next year, and $25,373 was left over after satisfaction of Nicolosi’s mortgage, interest and expenses. Both Nicolosi and Ralis petitioned for that surplus.

Ralis said North Side owed the firm about $110,000 in unpaid fees.

LaPorte Superior Court denied the Ralis claim, noting that the sheriff’s sale surplus did not stem from a judgment in favor of North Side.

The appeals court affirmed that decision, noting that state law says plainly that an attorney may hold a lien only for fees on a judgment rendered in favor of the person employing that lawyer to get the judgement.

“The record does not show that North Side … employed Ralis to obtain the foreclosure judgment to which Ralis purportedly attached its lien,” the opinion said.

The case is Law Offices of Robert J. Ralis v. Daniel Nicolosi, 26A-MF-338.