Diesen v. Cox

238 N.W. 785, 184 Minn. 400, 1931 Minn. LEXIS 1085
CourtSupreme Court of Minnesota
DecidedNovember 6, 1931
DocketNo. 28,551.
StatusPublished

This text of 238 N.W. 785 (Diesen v. Cox) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Diesen v. Cox, 238 N.W. 785, 184 Minn. 400, 1931 Minn. LEXIS 1085 (Mich. 1931).

Opinions

Hilton, J.

The parties to this action are attorneys practicing law at Clo-quet, Minnesota. Defendants are copartners. This action, commenced in May, 1928, was for an accounting on an alleged verbal copartnership agreement claimed to have been made between plaintiff and the defendants in 1919. It was tried to the court without a jury in December, 1928, and lasted many days.

Findings of fact and conclusions of law, all favorable to defendants, were made on July 23, 1930. In November of that year plaintiff made a motion to amend the findings of fact and conclusions of law and an alternative motion for a new.trial. On February 10,' 1931, an order denying plaintiff’s motions in all respects, except as to the amending of one finding on an immaterial matter, was filed. This appeal is taken from the order denying a new trial.

In October, 1918, a disastrous conflagration occurred in northeastern Minnesota; scores of lives were lost and property damage sustained running into many millions of dollars. Facts relative to the fire may be found in Hall v. Davis, 150 Minn. 35, 184 N. W. 25; McCool v. Davis, 158 Minn. 146, 197 N. W. 93; McCool v. Davis, 162 Minn. 281, 202 N. W. 900. The liability of the United States Railway Administration for the consequences of the fire was established in 1920-1921 by decisions of Minnesota courts.

Plaintiff predicates his action on the claim that defendants received and retained certain secret profits growing out of the *402 handling of litigation arising from the fire losses and that he is entitled to a portion thereof because of the partnership agreement.

N. B. Arnold and J. B. Arnold, constituting the firm of Arnold & Arnold, O. J. Larson, and H. T. Abbott were practicing lawyers at Duluth. Many of the losses occasioned by the fire were partially covered by insurance, which was thereafter paid to the insured by companies represented by Bates, Hicks & Felonie, Chicago attorneys.

In the fall of 1918 plaintiff made some investigations to determine the cause and source of the .fire. In February and March, 1919, many persons (principally residents of Cloquet) who had suffered loss from the fire formed an unincorporated association (later incorporated) under the name of the “Cloquet Fire Reimbursement Association.” Its purpose was to co-operate in obtaining proof as to the cause of the fire, fixing liability therefor, recovering damages from those liable, and raising funds for said purpose. Plaintiff and defendant Michaelson were consulted by and advised those instrumental in forming the association, and Michael-son was employed as its clerk or secretary for a time at a fixed salary. The association employed plaintiff and Michaelson to do investigation work; each was to be paid $15 per day for time actually spent in the field.

It was determined to prosecute actions to recover damages for losses sustained by members of the association. An arrangement entered into between its directors, plaintiff, and defendants provided that 25 per cent of the amounts recovered in each case should •be retained as attorneys’ fees. It was agreed by the parties hereto that the 25 per cent fees should be divided — 10 per cent to plaintiff, 10 per cent to defendants, and 5 per cent to one Wiley (not an attorney).

One finding of the court relative to the partnership agreement, the correctness of which is practically conceded by appellant, is:

“That plaintiff and defendants should co-operate and make available to each other their knowledge and information concerning the subject matter of said litigation and use their joint efforts in the *403 prosecution of such actions as they or either of them might commence; that in making said joint arrangement, no other claims or cases were in contemplation of the parties than those of members of said Reimbursement Association, who, through membership dues were creating the funds used in procuring data concerning said fire.”

It was later decided by the directors of the association, plaintiff, and defendants that additional attorneys should be retained to assist in the litigation. A meeting of the directors was held on July 31, 1919, attended by plaintiff, defendants, one of the Arnold firm, and a Mr. Felonie of Chicago, a member of the law firm of Bates, Hicks & Felonie. Whether or not' Felonie then promised to pay part of the expenses and failed to do so is not important.

Arnold & Arnold were already associated with the Bates firm as attorneys for its insurance companies and were also attorneys for a number of fire claimants in territory outside of the city of Cloquet whose losses were thought to have been caused by the same fire or by fires whose origin was due to the same causes. The Arnolds had made considerable investigation as to the cause and origin of the fires.

At the meeting an arrangement was made between the directors of the association, plaintiff, defendants, and Arnold & Arnold as follows: Arnold & Arnold were retained as attorneys to be associated with plaintiff and defendants in the prosecution of claims of members of the association, and 25 per cent of the net amount recovered by each claimant should be paid to all of said attorneys jointly as attorneys’ fees. The claims, Avhen made, or the actions, AA'lien commenced, should include the total amount of the loss suffered by each claimant, including the amount of insurance paid to such claimant; but plaintiff and defendants should not represent fire insurance companies in the recovery of the amounts to which such companies might be entitled by reason of losses paid to insured claimants. Arnold & Arnold could represent said companies. The percentage of recovery Avhich said attorneys for claimants should receive as fees.Avas to be computed only on the net amount *404 payable to the claimant after deduction of the amount payable to the insurer, and not upon any amount payable to the insurer out of the recovery.

After the conclusion of this meeting an agreement and contract was entered into between plaintiff, defendants, and Arnold & Arnold whereby they were to be associated and use their joint efforts, knowledge, and information in the prosecution of claims of and in the representation of clients whom either one of said three parties should have theretofore procured and should thereafter procure or control or directly represent or be responsible to or whose claims should be originally filed with' or in the office of either of said three parties, and of such claims as arose through losses in Carlton county and within what was known and referred to by said parties as Great Northern Railway territory; further, that the fees that should become due to or be received by any or all of said parties, as attorneys, for the prosecution of such claims for such clients should be divided as follows: 50 per cent to Arnold & Arnold; 50 per cent to plaintiff and defendants, except however that it was agreed and understood by all of the parties that none of the fees to be received by Arnold & Arnold or other firms representing fire insurance companies should be shared by plaintiff or defendants under said agreement.

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Related

Walker v. Patterson
208 N.W. 3 (Supreme Court of Minnesota, 1926)
McCool v. Davis
202 N.W. 900 (Supreme Court of Minnesota, 1925)
Hall v. Davis
184 N.W. 25 (Supreme Court of Minnesota, 1921)
McCool v. Davis
197 N.W. 93 (Supreme Court of Minnesota, 1924)

Cite This Page — Counsel Stack

Bluebook (online)
238 N.W. 785, 184 Minn. 400, 1931 Minn. LEXIS 1085, Counsel Stack Legal Research, https://law.counselstack.com/opinion/diesen-v-cox-minn-1931.