Summary
recognizing a valid contractual lien for a discharged former attorney
Summary of this case from Markwardt v. Zurich American Ins. Co.Opinion
No. 138.
Argued October 29, 1969. —
Decided December 2, 1969.
APPEAL from an order of the circuit court for Milwaukee county: LEANDER J. FOLEY, JR., Circuit Judge. Affirmed.
For the appellant there was a brief by Eisenberg, Kletzke Eisenberg, attorneys, and Jerome F. Pogodzinski of counsel, all of Milwaukee, and oral argument by Mr. Pogodzinski.
For the respondent the cause was submitted on the brief of Gibbs, Roper Fifield, attorneys, and John R. Hoaglund, Jr., of counsel, all of Milwaukee.
Attorney Sydney M. Eisenberg was retained by Herman P. Freyer to represent him in his cause of action against Mutual Benefit Health Accident Association.
On February 29, 1968, Freyer's claim against Mutual was settled by Eisenberg for a sum of $2,750. Freyer at this time was residing in Phoenix, Arizona.
Thereafter Mutual, by its attorneys, sent a release agreement to Eisenberg who was to have it executed by Freyer. Mutual also sent to Eisenberg a draft in the sum of $2,750 payable to Freyer, Eisenberg, and Alexander Lakes, Freyer's former attorney who had a lien of record on the proceeds of any settlement of the case.
Subsequently, it came to Mutual's attention that a dispute had arisen between Freyer and Eisenberg concerning the disposition of the $2,750 settlement. The amount of the settlement was not in issue but rather the dispute was over the distribution of the proceeds. Consequently, the release agreement was not signed by Freyer.
As a result, Mutual caused a stop-payment order to be issued on the draft and tendered to the court a new draft in the sum of $2,750 payable to the clerk of the circuit court for Milwaukee county.
In addition, Mutual, by Richard S. Gibbs, one of its attorneys, submitted a petition to the court setting forth the above facts and requested that the court order Freyer to execute the release agreement and stipulation and order for dismissal. The petition further requested that the court enter an order relieving Mutual of any and all further obligations to Freyer and that the court direct the clerk to disburse the proceeds of the settlement.
Eisenberg then filed an affidavit with the court asserting, among other things:
"3. That your affiant represented James J. Donohue, the plaintiff in Case No. C-1063, against the defendant, Herman P. Freyer, and that on November 22, 1963 a judgment of $910.15 was entered and filed in favor of the plaintiff, James J. Donohue.
"4. That subsequent to the return of said judgment, said Herman P. Freyer, Sydney M. Eisenberg and said James J. Donohue entered into an express oral agreement that execution of said judgment would be withheld against said Herman P. Freyer providing that the judgment due would be paid from the proceeds in the instant case, and that the amount now due is therefore $1,147.77.
"5. That your affiant, Herman P. Freyer and James J. Donohue further agreed that said Herman P. Freyer was thus orally assigning to your affiant the full amount of the judgment in favor of James J. Donohue with interest thereon; that said Herman P. Freyer further agreed to pay reasonable attorney fees in the sum of $295 due to your affiant for an unlawful detainer case for which your affiant represented Herman P. Freyer; that all of such funds were to be paid out of the forthcoming judgment or settlement Herman P. Freyer was to receive from Mutual of Omaha et al. in Case No. 310-004."
The court later held three hearings on the matter of the distribution of the $2,750 settlement. At each of these hearings, Eisenberg maintained that the court should order a disbursement of the proceeds so as to take into account Eisenberg's alleged assignment of the Donohue judgment and Eisenberg's claimed fees in the unlawful-detainer action. The trial court refused to do this and ordered instead:
". . . That the clerk of circuit court disburse to Attorney Sydney M. Eisenberg the sum of $925.06, attorneys fees and costs incurred in collection of the settlement herein, the sum of $360 to Attorney Alexander Lakes as attorneys fees in connection with the collection of the settlement herein, and the balance of $1,464.94 to Herman P. Freyer, plaintiff herein."
Eisenberg appeals from this order.
A single issue is presented by this appeal. Should the trial court have recognized Attorney Eisenberg's prior claims against Freyer and ordered disbursements on these claims from the $2,750 settlement?
Sec. 256.36, Stats., provides:
"Lien on proceeds of action to enforce cause of action.
Any person having or claiming a right of action, sounding in tort or for unliquidated damages on contract, may contract with any attorney to prosecute the same and give such attorney a lien upon such cause of action and upon the proceeds or damages derived in any action brought for the enforcement of such cause of action, as security for his fees in the conduct of such litigation; when such agreement shall be made and notice thereof given to the opposite party or his attorney no settlement or adjustment of such action shall be valid as against the lien so created, provided that such agreement for fees shall be fair and reasonable, and this section shall not be construed as changing the law in respect to champertous contracts." (Emphasis added.)
On this appeal, Eisenberg contends that he and Freyer entered into an oral agreement whereby it was agreed that Eisenberg would represent Freyer in his case against Mutual for the usual one-third contingency fee, plus additional sums in payment of Eisenberg's prior services and prior claim, all paid out of any settlement made.
It is clear that sec. 256.36, Stats., gave Eisenberg a lien in this case (Freyer's claim against Mutual), but that in the absence of an agreement for more payment the lien extended only to one third of the recovery in this case and the court had no jurisdiction to order the settlement disbursed so as to cover legal fees in another case or a judgment in another case.
See generally, Goldman v. Home Mut. Ins. Co. (1964), 22 Wis.2d 334, 126 N.W.2d 1; Wurtzinger v. Jacobs (1967), 33 Wis.2d 703, 148 N.W.2d 86.
Thus, the crucial specific question in the instant case becomes: What was the agreement between Freyer and Eisenberg respecting the latter's fees for this particular case?
The record on this issue is extremely meager. Admittedly, this was an oral agreement but there are vague references in the record to letters between the parties which would prove what the agreement was. These letters do not appear in the record before this court.
Eisenberg strenuously argues that the fee agreement in the instant case called for more than a one-third contingency arrangement. Yet, a strong inference to the contrary is provided by the following colloquy between Eisenberg and the court:
" The Court: How much money is your fee in this case? Not in any other.
" Mr. Eisenberg: The fee here was, —
" The Court: I think you wrote him a letter. I think we got a copy. I think he sent a copy of your letter. Now, one third of the fee, the total fee in the case is $916 of which sum, —
" Mr. Eisenberg: And 68 cents.
" The Court: Of which sum $360 goes to Mr. Lakes and the balance to you. The rest of the money of the $2,750 is to be made out in a check to Mr. Freyer. . . ."
This colloquy indicates that on at least one occasion Eisenberg acquiesced in a one-third fee for this case. Thus, on the basis of this, the trial court was correct in entering the order as it did.
Eisenberg may have valid claims against Freyer for prior legal work done on an entirely different matter, and in connection with the so-called Donohue "assignment," but the lower court could not enter an order providing for disbursement of Freyer's settlement to pay his attorney for this prior work and the Donohue claim, in the absence of a specific agreement so providing. The statutory lien is limited to the agreed-upon fees earned in the Freyer claim against Mutual. There is no other general lien on the Freyer settlement proceeds.
By the Court. — Order affirmed.