Opinion
No. 57320-9-I.
December 31, 2007.
Appeal from a judgment of the Superior Court for Whatcom County, No. 03-2-00859-8, Steven J. Mura, J., entered July 15, 2005.
Affirmed by unpublished opinion per Appelwick, C.J., concurred in by Coleman and Ellington, JJ.
Paul Hirsh, a New Jersey lawyer appeals an order quashing his statutory attorney lien on the judgment of Bianca Faust, Bianca Mele, and Gary Christopher Faust. Hirsh was an associated attorney on the case, but had no explicit contractual agreement with the clients. He argues that the plain language of RCW 60.40.010 entitles him to file a lien based on a contract implied in fact. Hirsh has failed to establish an implied contract. We affirm.
FACTS
Paul Hirsh is an attorney, certified by the New Jersey Supreme Court as a specialist in civil trials. In 2000, James DeZao, another New Jersey attorney, proposed a client referral agreement with Hirsh. The parties orally agreed that DeZao would refer personal injury cases to Hirsh and the two would split any attorney fees recovered. From 2000 to 2003 DeZao referred more than 75 personal injury cases to Hirsh. The two shared the attorney fees in those cases on a 50/50 basis.
In 2000, following an automobile accident in Ferndale, Washington, Bianca Faust, Bianca Mele, and Gary Christopher Faust (the Fausts) retained DeZao to represent them in a personal injury action and subsequently executed a contingency fee agreement. The only signatories to the agreement were the Fausts and DeZao. As part of the original oral agreement, DeZao referred the Faust case to Hirsh. Hirsh made no subsequent express oral or written contract or agreement with the Fausts regarding payment. In 2004, DeZao and Hirsh renegotiated their fee sharing agreement to give Hirsh a smaller percentage of the total attorney fees, depending on the outcome of the case.
Hirsh claims he worked approximately 500-600 hours on the Faust case, including conducting 12 depositions, preparing trial exhibits, and chairing two settlement conferences. Hirsh also claims he advanced $90,519 in litigation costs. DeZao acknowledges that Hirsh was assigned the task of overseeing the Faust case, but contends Hirsh had no independent contact with the Fausts and disputes the characterization of the legal work.
DeZao terminated Hirsh's involvement in the case in early 2005. The termination was confirmed by a very short letter on DeZao law firm letterhead and signed by the Fausts, which only stated that Hirsh must end all work on their behalf. In February 2005, Hirsh filed a notice of claim of attorney's lien. DeZao filed a motion to quash the attorney lien, which the trial court granted. In quashing the lien, the trial court reasoned that an attorney lien required a contractual relationship between the client and the attorney. The court found no explicit agreement between Hirsh and the Fausts and concluded, "there's also nothing to indicate that Mr. Hirsh intended to look towards the Fausts for payment, whether the Fausts intended to pay him. There's no indication that they ever had any discussion or any dealings with each other with regards to paying attorneys fees." After entry of judgment on the merits in the Faust case, Hirsh filed this notice of appeal.
Also in 2005, Hirsh filed a complaint against DeZao in the Superior Court of New Jersey seeking specific performance concerning the referral fees and reimbursement of litigation costs in the Faust case.
DISCUSSION
Washington law grants attorneys a statutory right to file a lien for compensation from their clients. Hirsh argues that the plain language of RCW 60.40.010 grants an associated attorney, with an implied contract for compensation with the client, the right to file an attorney lien.
Questions of statutory construction are reviewed de novo. Custody of Smith, 137 Wn.2d 1, 8-9, 969 P.2d 21 (1998); Our Lady of Lourdes Hosp. v. Franklin County, 120 Wn.2d 439, 443, 842 P.2d 956 (1993). Statutory interpretation seeks to determine and give effect to legislative intent. Duke v . Boyd, 133 Wn.2d 80, 87-88, 942 P.2d 351 (1997). Washington courts strictly construe the attorney lien statute. Ross v. Scannell, 97 Wn.2d 598, 606, 647 P.2d 1004 (1982).
At issue in this appeal is specifically the language of RCW 60.40.010(1)(e), which reads:
An attorney has a lien for his or her compensation, whether specially agreed upon or implied, as hereinafter provided. . . . (e) Upon a judgment to the extent of the value of any services performed by the attorney in the action, or if the services were rendered under a special agreement, for the sum due under such agreement, from the time of filing notice of such lien or claim with the clerk of the court in which such judgment is entered, which notice must be filed with the papers in the action in which such judgment was rendered, and an entry made in the execution docket, showing name of claimant, amount claimed and date of filing notice.
By the plain language of RCW 60.40.010, an attorney may file a lien for compensation, if he or she has an agreement for compensation, either express or implied. This interpretation is supported by Washington case law, which requires an attorney to have a contract, either express or implied, with a client in order to recover payment for legal services, regardless of whether the attorney asserts a claim under RCW 60.40.010. Lynch v. Deaconess, 113 Wn.2d 162, 165, 776 P.2d 681 (1989).
Hirsh claims an implied in fact contract for compensation with the Fausts. He argues an implied contract based on the "extensive legal services" provided by Hirsh and "plaintiffs' personal awareness of and acceptance of these services."
An implied in fact contract is an agreement whose existence depends on the conduct of the parties and arises by implication from circumstances that show a common understanding and mutual intent of the parties to contract with each other. Bell v. Hegewald, 95 Wn.2d 686, 628 P.2d 1305 (1981); Richards v. Pacific Nat'l Bank, 10 Wn. App 542, 519 P.2d 272 (1974); Jo hnson v. Nasi, 50 Wn.2d 87, 92, 309 P.2d 380 (1957). Washington courts have recognized implied contracts for attorney's fees. To find an implied contract for fees, the Supreme Court has stated, "[a]n implied contract differs not from an express contract except in the mode of proof. Both grow out of the intentions of the parties to the transaction, and there must be a meeting of minds whether the contract be express or implied." McKevitt v. Golden Age Breweries Inc., 14 Wn.2d 50, 52, 126 P.2d 1077 (1942).
The burden of proving a contract exists, whether express or implied, rests with the party asserting it and must prove each element of a contract, including existence of mutual intent. Johnson, 50 Wn.2d at 91. A party claiming a contract to pay for services must support the claim with evidence that is "clear, cogent, and convincing." Id.
In McKevitt v. Golden Age Breweries, Inc., the Supreme Court held that an attorney with no written contract may recover fees from a client when a contract was implied in fact by the circumstances surrounding the relationship. McKevitt, 14 Wn.2d at 61. One attorney/board member who also served as secretary-treasurer to the board of directors retained McKevitt. Id. at 51. McKevitt successfully represented the brewery in an action against a union. Upon completion of the action, the brewery contended no compensation was due because no discussions about fee arrangements had taken place. The court rejected the argument noting that the brewery board member, acting as an agent of the corporation, retained McKevitt and the parties behaved in a manner as to indicate payment for services would take place. Id. at 58. The court specifically looked to statements by the brewery president indicating he expected to pay for services, the authority of the secretary treasurer in hiring an attorney, and the brewery's acceptance of legal work that gave rise to a presumption to pay for services. Id. Based on an implied theory of contract, in McKevitt, an attorney was able to recover a proportionate share of attorney fees from one of three breweries based on the clear manifestation of intent by the parties to enter into a contract, even where no oral or written agreement existed. Id. at 52.
Hirsh relies on McKevitt to support the contention that acceptance of legal services gives rise to an implied promise to pay for his services and thus an implied in fact contract. Indeed, acceptance of services may raise a presumption of intent to pay for such services. Here, the question is who did the Fausts expect to pay for the services provided and to whom did they expect Hirsh to look for payment.
Washington case law, including McKevitt, requires clear indication of intent to enter into a contract. Id. at 50; Lynch, 113 Wn.2d at 164-65. Hirsh fails to meet his burden of proving an implied in fact contract existed with the Fausts. Although the Fausts accepted legal services from Hirsh, nothing indicates that either party intended to contract independent of their separate contractual arrangements with DeZao. Instead, Hirsh contracted only with DeZao.
At oral argument Hirsh asserted the Faust's signature on the letter directing him to stop working on the case is evidence of a contractual relationship. We do not believe that the substance of the letter or the Faust's signatures on the letter are sufficient to give rise to an inference that the Faust's were terminating a contractual relationship between them and Hirsh. The letter was from DeZao on his letterhead. At best the Faust's signature demonstrates concurrence in DeZao's termination of Hirsh. The letter is not sufficient to defeat summary judgment.
Lastly, Hirsh argues that the respondents have failed to meet their burden of production to invalidate the lien. He cites to Gustafson v. City o f Seattle, which holds a party seeking to invalidate a statutory lien bears the burden of producing evidence to justify the motion. Gustafson, 87 Wn. App. 298, 304, 941 P.2d 701 (1997). However, Hirsh must first establish that he had a contractual relationship with the Fausts that made him eligible to file a lien under RCW 60.40.010(1)(e). Only after the criteria for the statute has been met does the burden shift to DeZao.
Hirsh lacked a contractual relationship with the Fausts. We affirm the trial court's decision to quash the motion for an attorney lien.