Hanson v. State Farm Insurance Co.

661 N.W.2d 659, 2003 Minn. App. LEXIS 633, 2003 WL 21219796
CourtCourt of Appeals of Minnesota
DecidedMay 27, 2003
DocketCX-02-1620
StatusPublished
Cited by1 cases

This text of 661 N.W.2d 659 (Hanson v. State Farm Insurance Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hanson v. State Farm Insurance Co., 661 N.W.2d 659, 2003 Minn. App. LEXIS 633, 2003 WL 21219796 (Mich. Ct. App. 2003).

Opinion

OPINION

MINGE, Judge.

Appellants argue that the district court erred when it determined that a one-third contingent fee arrangement that the trustee entered into before his appointment did not apply to appellant law firm’s representation after the trustee’s appointment. Because we conclude that the trustee’s authority related back to his representative actions prior to his appointment, we hold that the one-third contingent fee agreement is valid, and we reverse.

FACTS

This case concerns attorney fees in a lawsuit filed over the death of 9-year-old Jenna Hegstrom, who was killed in a car accident. Hegstrom’s mother had previously died of cancer, and her father was in jail. On January 11, 2002, Hegstrom’s maternal grandfather, appellant Larry Hanson, retained the appellant law firm of Mack & Daby, P.A., and sought to be appointed trustee for Hegstrom’s next of kin. In retaining Mack & Daby, Hanson signed a contingent fee agreement whereby Mack & Daby would receive one-third of any amount collected in Hanson’s “ac *661 tion against the automobile insurers of the vehicles involved in the death” of Heg-strom. The next day, January 12, 2000, Hanson was appointed trustee for Heg-strom’s next of kin.

On January 18, 2000, Hanson sued Rachel O’Brien for the wrongful death of Jenna Hegstrom. On March 24, 2000, Hanson requested court approval of a proposed settlement whereby O’Brien would pay $80,000 to Hegstrom’s next of kin. At that point in the proceeding, respondent Jodi Madsen, on behalf of Hegstrom’s paternal relatives, objected to the proposed settlement. Madsen also brought a motion to remove Hanson as trustee. Madsen had hired the law firm of Hauer, Fargione, Love, Landy & McEllistrem, P.A. (the Hauer law firm) to handle this removal request.

Before the objections were decided by the district court, trustee Hanson and Madsen agreed to a partial settlement. Under the settlement, Madsen dropped the objection to Hanson as trustee. Hanson and Madsen agreed to serve as co-trustees with the understanding that they would move forward with a claim against State Farm, the underinsured motorist (UIM) carrier. Madsen and Hanson also agreed that the law firms they had each retained would serve as co-counsel in making that claim. On October 28, 2000, Mad-sen and Hanson were appointed co-trustees.

On October 25, 2000, Madsen signed a contingent fee agreement with the Hauer law firm. The agreement provided that Madsen would pay 15% of any amount recovered if the matter was settled before trial and that Madsen would pay 20% of any amount recovered if the matter was tried to a conclusion. Madsen signed the agreement as “Trustee for the heirs and next of kin of Jenna Hegstrom.” Hanson was neither informed of, nor did he sign, the agreement.

• Hanson and Madsen pursued the UIM claim in Dakota County, and a trial was held on March 19 and 20, 2002. Both law firms participated in the trial, and the jury returned a verdict of $223,308.84.

After the verdict in the UIM claim, Hanson sought distribution of the $30,000 wrongful death settlement. The proposed distribution included a distribution of $10,000 to Mack & Daby pursuant to the one-third contingent fee agreement between Mack & Daby and Hanson. Although Madsen objected to the proposed distribution, on June 2, 2002, the Kandi-yohi County district court approved the distribution and awarded Mack & Daby $10,000 in attorney fees.

In June 2002, Mack & Daby sought distribution of the proceeds of the UIM lawsuit. Mack & Daby proposed a distribution whereby it would receive one-sixth of the proceeds, which represented half of its one-third contingent fee contracted for between Hanson and Mack & Daby. Madsen objected to the distribution, and on August 30, 2002, a Dakota County district court determined that the contingent fee agreement between Madsen and the Hauer law firm governed and that the law firms were entitled to a total of 20% of the proceeds, with each law firm receiving 10% of the proceeds.

Hanson and Mack & Daby appeal from the Dakota County order awarding them 10% of the proceeds from the UIM lawsuit and contend that the one-third contingent fee agreement governs the distribution of their proceeds from the UIM lawsuit. No appeal has been taken from the order directing payment of the 10% contingent fee to the Hauer firm.

*662 ISSUE

Did the district court err by determining that the Mack & Daby contingent fee agreement was not valid as to the UIM lawsuit?

ANALYSIS

The issue on appeal is whether the one-third contingent fee agreement is valid as to the proceeds of the UIM lawsuit. Contingent fee agreements are treated as any other contract. Holt v. Swenson, 252 Minn. 510, 514-15, 90 N.W.2d 724, 728 (1958). “The construction and effect of a contract are questions of law for the court.” Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn.1979). A reviewing court is not bound by and need not give deference to a district court’s decision on a purely legal issue. Frost-Benco Elec. Ass’n v. Minnesota Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984). Accordingly, our standard of review is de novo.

The Dakota County district court found that the one-third contingent fee agreement was not binding on the heirs and next of kin because it was signed before Hanson was a trustee. Thus, the issue in this case is not whether the contingent fee agreement is unreasonable; the issue is whether appellant Hanson could bind the heirs and next of kin by signing a contingent fee agreement before he was appointed trustee of the heirs and next of kin. Appellants argue that though Hanson signed the one-third contingent fee agreement before he was appointed trustee, as soon as he was appointed trustee, his authority related back to and validated the one-third contingent fee agreement.

The UIM lawsuit in this case was brought under the wrongful death statute, which is found at Minn.Stat. § 573.02 (2002). The title of Chapter 573 of the Minnesota Statutes is “Personal Representatives, Heirs; Actions.” Minn.Stat. Ch. 573 (2002). In Beck v. Groe, the court described a trustee as “acting as the personal representative by virtue of the provisions of § 573.02, the wrongful death act.” Beck v. Groe, 245 Minn. 28, 33, 70 N.W.2d 886, 891 (1955); see also Hachmann v. Mayo Clinic, 150 F.Supp. 468, 469 (D.Minn.1957) (referring to Minn.Stat. § 573.02 and noting “[t]he statute creates an action, arising upon death, which may be maintained by the personal representative of the deceased”). Thus, the Minnesota Supreme Court has characterized the trustee in a wrongful death suit as a personal representative.

The relation back doctrine applies to the authority of a personal representative. In re Estate of Gerhardt,

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Cite This Page — Counsel Stack

Bluebook (online)
661 N.W.2d 659, 2003 Minn. App. LEXIS 633, 2003 WL 21219796, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanson-v-state-farm-insurance-co-minnctapp-2003.