Frazee v. Frazee

660 P.2d 928, 104 Idaho 463, 1983 Ida. LEXIS 413

• Court: Idaho Supreme Court
• Decided: January 28, 1983
• Docket: 14042
• Status: Published

Opinions

SHEPARD, Justice.

This is an appeal from an order of the district court denying petitioner Reeves a lien for attorney fees against the property of respondent Frazee, whose wife was represented by Reeves during a divorce action. We affirm.

The Frazees sought a divorce before the magistrate court which, following a stipulated property settlement, issued a decree of divorce drafted by Reeves, the attorney for defendant Mrs. Frazee. That decree required Kenneth Frazee to pay Elaine Frazee $3,000 in cash in six monthly installments of $500 each, beginning July 1, 1979, and it required Kenneth Frazee to pay to Reeves $1,000 “as a portion of defendant’s reasonable attorney’s fees.”¹ The divorce decree itself recited that “counsel for defendant [Elaine Frazee] have withdrawn as attorneys of record herein.”

During the following months and prior to January 4, 1980, Kenneth Frazee paid all but $300 of the $3,000 required by the decree of divorce. On January 7, 1980, Reeves filed a notice of attorney’s lien in the Frazee v. Frazee action in the amount of $2,080. He also filed a motion to foreclose that lien, supported by an affidavit stating merely that he had billed his client, Elaine Frazee, for services in the sum of $2,080, that the bill had not been paid, and that Kenneth Frazee had also refused to pay such sum to Reeves. Following additional proceedings, Kenneth Frazee tendered the $1,000, plus interest, which the judgment had required him to pay to Reeves, and that tender was accepted by Reeves. The magistrate court ultimately denied Reeves’ claim of lien for $2,080 against Kenneth Frazee, which order was appealed to the district court and affirmed except for the sum of $300, which remained owing from Kenneth Frazee to Elaine Frazee at the time Reeves filed his notice of lien. Reeves appeals here from the order denying his claim of lien against Kenneth Frazee. No cross-appeal is taken from the district court’s allowance of a lien in favor of Reeves against Kenneth Frazee in the amount of $300.

Preliminarily, we note that pursuant to Skelton v. Spencer, 102 Idaho 69, 625 P.2d 1072, cert. denied, 454 U.S. 894, 102 S.Ct. 390, 70 L.Ed.2d 208 (1981), Reeves was not required to file an independent action but could file his claim of attorney’s lien in connection with the principal case, i.e., the Frazee divorce proceedings.

A lien for attorney’s fees can be either a possessory or a charging lien. Nancy Lee Mines, Inc. v. Harrison, 93 Idaho 652, 471 P.2d 39 (1970). The possessory or retaining lien is of common law origin and allows an attorney to keep possession of documents, money or other property obtained in his professional capacity until he receives payment for his professional services. Nancy Lee Mines, Inc. v. Harrison, supra; Curtis v. Richards, 4 Idaho 434, 40 P. 57 (1895). Such a retaining lien is passive and not enforceable by foreclosure and sale. Ross v. Scannell, 97 Wash.2d 598, 647 P.2d 1004, 1008 (1982); Midvale Motors, Inc. v. Saunders, 21 Utah 2d 181, 442 P.2d 938 (1968); S. Speiser, Attorneys’ Fees § 16:13 (1973). An attorney’s charging lien did not exist in Idaho at common law. Kerns v. Washington Power Co., 24 Idaho 525, 536, 135 P. 70, 73 (1913). See also Ross v. Scannell, supra; Merchants' Protective Association v. Jacobsen, 22 Idaho 636, 127 P. 315 (1912). However, such has been codified in Idaho by I.C. § 3-205, which provides in pertinent part:

“From the commencement of an action, or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon his client’s cause of action or counterclaim, which attaches to a verdict, report, decision or judgment in his client’s favor and the proceeds thereof in whosoever hands they may come; and can not be affected by any settlement between the parties before or after judgment.”

A charging lien is a lien for the attorney’s “services rendered in procuring a judgment, decree, or award for his client, which attaches to the client’s cause of action, verdict and judgment and the proceeds thereof” (Speiser, supra, at § 16:14; accord, Ross v. Scannell, supra; Nancy Lee Mines, Inc. v. Harrison, supra), is not dependent upon possession, and is capable of adjudication and enforcement (Speiser, supra, at § 16:14).

Almost the entire argument of appellant Reeves is built upon the authority of Renfro v. Nixon, 55 Idaho 532, 45 P.2d 595 (1935). There Renfro, an injured employee, secured an award from the then Industrial Accident Board against his employer Nixon in the sum of $177. Thereafter, without the consent or knowledge of Renfro’s attorney Bistline, the employer paid the amount of the judgment directly to the employee and satisfaction thereof was entered. Bistline moved to set aside the satisfaction in order to enforce his lien for attorney fees. Renfro was at that time insolvent and unable to pay the fee. The only defense asserted by the employer to the lien was lack of actual notice and laches. The court held that the satisfaction should be vacated and the judgment enforced for the amount of the lien. We note that no defense was asserted that the amount of claimed attorney’s fees was unliquidated, and the clear implication contained therein is that such attorney’s fees were set by the Industrial Accident Board. I.C. § 43-1411 (1932) (current version at I.C. § 72-804).

By contrast, in the instant case there is nothing to indicate that attorney’s fees have ever been adjudicated. Indeed, the record here indicates that Reeves merely sent a bill to his client, and that when such bill was not paid, Reeves attempted collection thereof from the opposing party — this, despite the considerable amount of property transferred between the parties as a result of the divorce decree and the fact that Reeves specifically withdrew coincident with and as a part of that same divorce decree.

Reeves asserts that he may claim any sum in fees without the necessity of proving the reasonableness of such fees in an adjudicative process and that he may then levy against the property of the opposing party, who is a total stranger to the contract under which Reeves claims money. We decline to so interpret the attorney’s charging lien statute, and to the extent that Renfro v. Nixon provides any support for such claim, it is overruled.

The ethical and policy considerations involved in a construction of attorney’s lien statutes were recently before the Washington Supreme Court in Ross v. Scannell, 97 Wash.2d 598, 647 P.2d 1004 (1982). The court there dealt with the practice of liens of attorneys being attached to property for unadjudicated and unliquidated claims:

“Although we recognize the common problems faced by attorneys in collecting their well deserved fees, the reasons for our hesitancy are apparent. The result of our approving the practice would allow members of the Bar to cloud title to real property with ‘claims of attorney lien’ without resort to any adjudication of such claims. The potential for economic coercion by attorneys is obvious....

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“In an age when ethics of the bar are scrutinized in every quarter, we must hold that the result reached by the trial court [allowing the unperfected attorney lien] is one neither contemplated by the attorney lien statute nor in accord with the public interest.” 647 P.2d at 1008-1009.

The charging lien of an attorney is equitable in nature and triable to the court. Skelton v. Spencer, supra; Nancy Lee Mines, Inc. v. Harrison, supra. It is also clear that a decree of divorce is entered pursuant to the equitable powers of the court. Karr v. Karr, 628 P.2d 267 (Mont.981), cert. denied, 455 U.S. 1016, 102 S.Ct. 1709, 72 L.Ed.2d 132 (1982); Cookson v. Cookson, 246 Or. 118, 424 P.2d 218 (1967); Harris v. Harris, 63 Wash.2d 896, 389 P.2d 655 (1964); Hiltbrand v. Hiltbrand, 68 Idaho 275, 193 P.2d 391 (1948). The equitable source of the claimed charging lien necessitates that an attorney take affirmative steps in an adjudicative process to perfect and reduce his lien to a judgment or order of the court. Here no such process was followed, but rather Reeves sought a writ of execution against Kenneth Frazee without any opportunity for Frazee to challenge the amount or propriety thereof. See due process cases, Little v. Streater, 452 U.S. 1, 101 S.Ct. 2202, 68 L.Ed.2d 627 (1981); Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972); Armstrong v. Manzo, 380 U.S. 545, 85 S.Ct. 1187, 14 L.Ed.2d 62 (1965).

Here the magistrate and district court, sitting as courts of equity and considering the factors militating in favor of each party, had ample evidence upon which to base the conclusion that the award of an attorney’s lien was unwarranted. Reeves himself drafted the decree, which required $3,000 in cash “to be paid to defendant by plaintiff” in monthly installments for six months. Under the literal language of that decree drafted by Reeves, the plaintiff Kenneth Frazee had no alternative but to make payment to the defendant Elaine Frazee month by month; if he paid any other person, he left himself open to a contempt citation. Further, Reeves had withdrawn as Elaine Frazee’s counsel. The record discloses that Elaine Frazee herself had indicated to Kenneth Frazee’s counsel that she was no longer represented by Reeves and that Reeves had no authority to collect any sums on her behalf. Hence, Reeves had abundant notice of Kenneth Frazee’s obligation under the decree and the time within which it was required to be paid, but nevertheless waited fully six months before notifying either of the parties of his claim of attorney’s lien.

In sum, an attorney’s charging lien is not passive as is the possessory or retaining lien. A charging lien is only brought about by some affirmative act of the party asserting the lien in-reducing it to a judgment or order of the court. We note the difference in the instant case from the situation in Skelton v. Spencer, supra. There a “fund” was in existence representing the sums that the attorney had obtained for his client. Here no such “fund” existed, since the moneys had already been paid to the client. Again, we note that since Reeves had immediately withdrawn as attorney, no authority existed to pay him any sum of money on behalf of his erstwhile client.

The orders of the district court are affirmed. Costs and attorney’s fees to respondent.

DONALDSON, C.J., and McFADDEN, J. (Ret.), concur. McFADDEN, J. registered his vote prior to his retirement on August 31, 1982. BAKES, J., concurs in the result.

1 . Mifflin v. Mifflin, 97 Idaho 895, 556 P.2d 854 (1976), held that in such case the wife’s attorney fees should be paid from the total community property prior to equitable division of the property. But since here the record indicates such fees were stipulated to as between the parties and no cross-appeal is taken therefrom, we will not disturb that aspect of the decree.