Rel: November 8, 2024
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA OCTOBER TERM, 2024-2025
_________________________
SC-2024-0142 _________________________
John A. Daugherty
v.
Molly Chew Baker
Appeal from Jefferson Circuit Court (CV-22-900749)
MENDHEIM, Justice.
Attorney John A. Daugherty appeals pro se from the Jefferson
Circuit Court's judgment dismissing of his complaint asserting a breach- SC-2024-0142
of-contract claim against his former client, Molly Chew Baker ("Molly").
We affirm.
I. Facts
Daugherty and Molly had been friends for some time when Molly
came to Daugherty and told him that her former husband, Christopher
Allan Baker ("Christopher"), had not been complying with an "Agreement
of the Parties" that had been adopted as part of a consent divorce
judgment that had been made final on August 19, 2014, in the Domestic
Relations Division of the Jefferson Circuit Court, case number DR-2014-
900024 ("the domestic-relations case"). Specifically, Molly told Daugherty
that Christopher had not been paying the agreed-upon amount of
monthly alimony, which had resulted in Molly's struggling to meet daily
financial needs. Molly informed Daugherty that her current attorney was
having a difficult time serving Christopher with a petition for a rule nisi
that sought to hold Christopher in contempt for his failure to abide by
the divorce judgment. Molly believed that the domestic-relations court
might dismiss the petition for a rule nisi based on a failure of service and
that, if that happened, she wanted to hire Daugherty to see if he could
have better success. According to Molly, Daugherty told her that he had
2 SC-2024-0142
no experience in family law but that he did have experience in collecting
money judgments and that he would help her in the collection of the
alimony arrears.
Eventually the petition for a rule nisi was dismissed. According to
Daugherty, Molly informed him that her previous attorney had been
charging her $400 per hour and that she could not afford to compensate
Daugherty anywhere close to that amount. Therefore, Daugherty told
Molly that he was willing to take the case on a contingency-fee basis.
Daugherty asserted that Molly "loved the idea of not being required to
make any payments regarding the Petition for Rule Nisi until Daugherty
collected from [Christopher]."
On August 12, 2019, Daugherty and Molly executed an attorney-
client contract ("the contract") that was drafted by Daugherty. In
pertinent part, the contract provided:
"[Molly] does hereby employ [Daugherty] as [Molly's] attorney, and further does hereby contract for legal services to be provided for [Molly] in the representation of [Molly] in regard to: collect on Chris Baker's default with regard to his divorce agreement with [Molly].
"The fee for such services shall be a contingency of: 1/4 of any and all recovery of amounts Chris Baker agreed to give Molly with regard to divorce settlement of Jefferson County
3 SC-2024-0142
divorce case #: DR-2014-900024 after all expenses have been reimbursed.
"If applicable, court costs, deposition costs, duplicating costs, filing fees, accountant's fees, appraiser's fees, consultant's fees, investigator's fees, title insurance, land surveyors and other professional fees incurred on [Molly's] behalf, and other disbursements will be paid directly by [Molly], or when advanced by [Daugherty], will be borne by and paid for by [Molly].
"….
"ARBITRATION: Any disagreement, difference or controversy between [Molly] and [Daugherty] involving [Daugherty's] representation of [Molly's] case may be submitted to arbitration at the discretion of [Daugherty]. The arbitration shall comply and be governed by the provisions of the State of Alabama and all applicable Federal law. The arbitration shall be arbitrated by an arbitrator panel composed of three arbitrators.
"This Agreement embodies the entire Agreement of the parties hereto with respect to the matters herein contained, and it is agreed that the terms, conditions, and stipulations hereof shall not be modified or revoked unless by written agreement signed by both parties and attached hereto and made a part hereof.
"[Molly] agrees to pay a reasonable attorney fee and the costs of collection in the event this debt has to be collected due to the default of [Molly] as a result of [her] failure to pay any monies due under this contract."
4 SC-2024-0142
On September 12, 2019, Daugherty filed on Molly's behalf a
"Petition for Rule Nisi" against Christopher in the domestic-relations
case. On May 12, 2020, Daugherty filed on Molly's behalf a summary-
judgment motion in that case. On June 29, 2020, the domestic-relations
court denied that motion. On July 3, 2020, Daugherty filed on Molly's
behalf a "First Amendment to Petition for Rule Nisi" against
Christopher. According to Daugherty, he paid all the expenses with
regard to those filings. Daugherty also asserted that he "obtained all the
needed discovery in order to present the case, pre-marked all exhibits for
trial and submitted those eleven (11) exhibits to the [domestic-relations]
court and to [Christopher's] attorney, Marcus Jones."
On September 24, 2020, Christopher filed a separate petition to
modify his monthly alimony payments. On May 11, 2021, the two matters
-- Molly's petition for a rule nisi and Christopher's petition to modify his
monthly alimony -- were consolidated into a single action, and they were
set for a trial to be held on August 17, 2021. According to Daugherty, on
April 13, 2021, he filed a motion to continue the trial
"in order to give Molly additional time to find another attorney to help her to defend only against [Christopher's] 9/24/2020 Petition to Modify Alimony … since I only was willing to represent Molly on her Complaint for Rule Nisi to 5 SC-2024-0142
collect deficiencies regarding [Christopher's] failure to pay all that was due …, and the Court granted the said motion to continue."
On June 29, 2021, Molly filed a motion to have separate trials for
the two petitions. The domestic-relations court denied the motion on the
same day. On July 10, 2021, Molly filed a second motion for separate
trials. On July 14, 2021, the domestic-relations court denied the second
motion for separate trials. Daugherty then agreed to represent Molly
with respect to both petitions. As he stated in response to a request for
admissions from Molly, he
"reluctantly agreed to represent Molly with regard to the counterclaim to Petition to Modify Alimony and even went so far as to recommend that we file a Petition to Modify Child Support in the event Molly sincerely could not arrange for another attorney to represent her with any other aspects of her case other than the subject matter of the Rule Nisi I filed in which we each agreed as set out in our 8/12/2019 Attorney/Client contract."
Daugherty also admitted in another filing that he "agreed to represent
[Molly] on all the matters with no change in the said Attorney Fees
Contract between Daugherty and [Molly]."
On August 9, 2021, Molly emailed Daugherty and demanded that
he withdraw from representing her. Daugherty emailed a response in
6 SC-2024-0142
which he stated that he was willing to represent Molly with respect to
both petitions but that,
"[a]lternatively, I am willing to file the Motion to Withdraw as to representing you, but I will need a little time to compute the fees I am due. I am not willing to give you any of the documents I have in my possession until you pay me my entire attorney fees which I will need a little time to compute. As you can see by my attachment that the Alabama Rules of Professional Conduct authorize[] me to retain your papers until my fees are paid. If this is the route you want to take, then I'll file a Motion to Intervene in your case against [Christopher] so I can enforce the collection of my attorney fees."
On August 11, 2021, Daugherty filed a motion to withdraw from
representing Molly in the domestic-relations case. On August 16, 2021,
the motion to withdraw was granted. Also on August 16, 2021, Molly and
Christopher filed a joint motion to dismiss the domestic-relations case.
On August 17, 2021, the domestic-relations court entered an order
granting Christopher and Molly's joint motion to dismiss, specifically
dismissing both Molly's petition for a rule nisi and Christopher's petition
to modify his alimony payments.
On August 17, 2021, Daugherty filed a motion to intervene in the
domestic-relations case in order to protect his interest in the attorney
fees he believed that he was owed by Molly, and he filed a petition to
7 SC-2024-0142
claim and secure attorney fees based on the contract. On the same date,
the domestic-relations court denied Daugherty's motion to intervene.
On September 9, 2021, Daugherty filed a "Motion to Stay
Proceedings and Motion to Refer Dispute to Arbitration" in which
Daugherty attempted to invoke the arbitration provision in the contract
for determining the issue of "what amount of attorney fees should be
awarded to Daugherty as a result of [Molly's] having instructed
Daugherty that she no longer is willing for Daugherty to represent her in
regard to" the domestic-relations case. On September 10, 2021, the
domestic-relations court dismissed Daugherty's motion seeking to invoke
arbitration because "[t]his case was dismissed by agreement of [Molly]
and [Christopher]. Therefore, there is no longer a case pending and[,]
thus, there is no case in which to intervene by the former attorney for
[Molly], let alone one in which this Court could compel arbitration on a
contract issue."
On March 16, 2022, Daugherty commenced the present action by
filing a pro se complaint in the Jefferson Circuit Court alleging that Molly
had breached the contract; Daugherty sought to have the contract
"enforced as written." Daugherty asserted that he was entitled to, "at a
8 SC-2024-0142
minimum, … one fourth (1/4) of the sum of the accumulated alimony
deficiency of $4,000.00/month from April 2016 until August 2021 plus
judicial interest, (2) a reasonable attorney fee[,] and (3) the total expenses
Daugherty has paid for this case." Daugherty attached as exhibits to his
complaint copies of: (1) the contract; (2) the "Final Judgment of Divorce"
entered by the domestic-relations court on August 19, 2014; (3) the July
31, 2014, "Agreement of the Parties" between Christopher and Molly; and
(4) the August 9, 2021, email in which Molly demanded that Daugherty
withdraw as her counsel in the domestic-relations case.
On May 11, 2022, Molly filed a motion to dismiss Daugherty's
complaint, arguing that Daugherty's action was barred by the doctrine of
res judicata because Daugherty had previously sought to enforce the
contract in the domestic-relations case, but the domestic-relations court
had "denied [Daugherty's] petition for fees." On the same date, Molly filed
an "Answer and Counterclaim" in response to Daugherty's complaint.
Molly's counterclaim asserted five counts against Daugherty: four counts
of "Legal Malpractice" pursuant to the Alabama Litigation
Accountability Act ("the ALAA"), Ala. Code 1975, § 12-19-270 et seq., and
one count seeking a judgment declaring that the contract was void
9 SC-2024-0142
because it contained "an ethically prohibited arbitration term" and
because it allowed a contingency fee in a domestic-relations matter,
which, she contended, violated Rule 1.5 of the Alabama Rules of
Professional Conduct. Molly attached as exhibits to her answer and
counterclaim copies of: (1) email correspondence between Daugherty and
Molly concerning her decision to terminate the attorney-client
relationship and (2) the Formal Opinion of the General Counsel of the
Alabama State Bar, RO-02-04, that addressed the appropriateness of an
arbitration provision in an attorney-client contract. Molly sought an
unspecified amount of compensatory and punitive damages in her
counterclaim.
On May 17, 2022, Daugherty filed a response in opposition to
Molly's motion to dismiss his complaint. In his response, Daugherty
noted that the domestic-relations court had stated in its September 10,
2021, order that "this is not the proper Court to seek the contractual relief
that the former attorney for [Molly] is seeking." Thus, Daugherty argued,
the domestic-relations court had not substantively decided that
Daugherty could not seek compensation for legal fees allegedly due under
the contract, and so, he said, the doctrine of res judicata did not apply.
10 SC-2024-0142
Daugherty attached as an exhibit to his response a copy of the domestic-
relations court's September 10, 2021, order dismissing Daugherty's
motion to invoke arbitration.
On October 3, 2022, the circuit court entered an order setting
Molly's motion to dismiss for a hearing on October 25, 2022. On October
20, 2022, Molly filed a reply to Daugherty's response to her motion to
dismiss in which she again asserted that Daugherty's complaint should
be precluded by the doctrine of res judicata. Molly attached as exhibits to
her reply copies of: (1) the domestic-relations court's August 17, 2021,
order dismissing Molly's petition for a rule nisi and Christopher's petition
to modify his alimony payments; (2) Daugherty's motion to intervene in
the domestic-relations case; (3) Daugherty's petition to claim and secure
attorney fees based on the contract; (4) the domestic-relations court's
August 17, 2021, order denying Daugherty's motion to intervene; (5)
Daugherty's motion to stay and to refer the dispute to arbitration; and
(6) the domestic-relations court's September 10, 2021, order dismissing
Daugherty's motion to invoke arbitration.
On October 21, 2022, Daugherty filed a summary-judgment motion
in which he contended that he was entitled to a judgment as a matter of
11 SC-2024-0142
law based on the contract. In that motion, Daugherty provided a
breakdown of the amount he believed he was due under the contract
based on the premise that he would have sought $455,009.08 from
Christopher under the petition for a rule nisi, that Daugherty paid
$727.83 in expenses during his work for Molly in seeking a rule nisi, and
that one-fourth of the amount sought plus expenses was $114,480.10. In
support of his summary-judgment motion, Daugherty attached as
exhibits: (1) an affidavit from himself; (2) a copy of the July 31, 2014,
"Agreement of the Parties" between Christopher and Molly; (3) the
August 19, 2014, "Final Judgment of Divorce" between Christopher and
Molly; (4) a copy of the contract between himself and Molly; and (5) a copy
of the "Trial Brief" Daugherty had prepared to be filed in the domestic-
relations case on Molly's behalf but that was not filed because the case
had been dismissed by the agreement of Christopher and Molly.
On October 28, 2022, Daugherty filed a "Memorandum" in which he
stated that he sought to provide the circuit court with "some law which
applies to the case." Daugherty argued that contingency fees are
protected under the law even when an attorney is not retained through
12 SC-2024-0142
the conclusion of a case, and he repeated that he believed that he was
entitled to $114,480.10 under the contract.
On November 3, 2022, Molly filed a motion to strike Daugherty's
"Memorandum," contending that Daugherty's filing was "inappropriate"
because the circuit court had instructed the parties "not to file additional
briefs" following the October 25, 2022, hearing concerning Molly's motion
to dismiss. On July 10, 2023, Molly filed a "Motion for Ruling on
Defendant's Pending Motion to Dismiss" because no ruling had yet been
entered by the circuit court concerning Molly's motion to dismiss
Daugherty's complaint.
On February 15, 2024, the circuit court entered an order granting
Molly's motion to dismiss. In that order, the circuit court specifically
noted it was "tak[ing] judicial notice of the herein court file and a
corresponding court file representing a Domestic Relations Case, DR-
2014-900024, … Molly Chew Baker v. Christopher Alan Baker." The
circuit court first rejected Molly's contention that Daugherty's claims
were barred by the doctrine of res judicata because, it reasoned, "[t]he
prior judgment was not rendered on the merits, but was dismissed per
joint agreement by the parties, therein." However, the circuit court then
13 SC-2024-0142
highlighted Rule 1.5(d)(1) of the Alabama Rules of Professional Conduct,
which provides:
"(d) A lawyer shall not enter into an arrangement for, charge, or collect:
"(1) any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a divorce or upon the amount of alimony or support, or property settlement in lieu thereof …."
The circuit court concluded:
"The Court FINDS that [Daugherty's] Complaint, in seeking a 1/4 contingency amount of the sum of the accumulated alimony deficiency due to [Molly], which is designed to help the receiving spouse through rehabilitative measures to become financially independent and to support that party's reasonable needs, plus the judicial interest, is contrary to the Alabama Rules of Professional Conduct -- and the Client-Lawyer Relationship, is unconscionable and is against public policy."
(Emphasis and capitalization in original.) Thus, the circuit court granted
Molly's motion to dismiss Daugherty's complaint because it determined
that the contract was against public policy under Rule 1.5(d), Ala. R. Prof.
Cond. On the same date, February 15, 2024, the circuit court entered a
separate order dismissing as moot Daugherty's summary-judgment
motion and Molly's motion to strike Daugherty's post-hearing
memorandum. 14 SC-2024-0142
On February 16, 2024, Molly filed a motion seeking to set a trial
date "for a bench trial on [Molly's] counterclaims against [Daugherty]."
On February 23, 2024, Daugherty filed a postjudgment motion to
alter, amend, or vacate the circuit court's February 15, 2024, order. In
that motion, Daugherty contended that the contingency fee contained in
the contract fit within an exception to the prohibition on contingency-fee
agreements by attorneys in domestic-relations cases. In support of that
contention, Daugherty cited to and attached to his motion copies of two
formal opinions from the General Counsel of the Alabama State Bar.
Specifically, Daugherty argued that an exception applied in domestic-
relations cases seeking the collection of child support or alimony after a
completed divorce. Additionally, Daugherty presented a new argument
contending that, even if the contract was void for being against public
policy due to the contingency-fee arrangement, he was still entitled to
compensation based on the theory of quantum meruit because of the
services he had rendered to Molly. Daugherty asserted that if the
contract fits within the exception to the prohibition on contingency fees
in the Alabama Rules of Professional Conduct, he was entitled to
$113,752.27 for services rendered in the domestic-relations case, plus
15 SC-2024-0142
$23,265.04 based on quantum meruit for the expenses he had allegedly
incurred in prosecuting the present action. Thus, Daugherty claimed that
the total amount owed to him by Molly was $137,017.31. Daugherty
asserted that if the circuit court affirmed its conclusion that the
contract's contingency-fee arrangement was contrary to public policy,
then, under the theory of quantum meruit, he was entitled to $70,930 for
services rendered in the domestic-relations case and $23,265.04 for the
expenses he had allegedly incurred in prosecuting the present action.
Thus, Daugherty claimed that the total amount owed to him by Molly
under quantum meruit was $94,195.04.
On February 26, 2024, the circuit court entered an order denying
Daugherty's postjudgment motion without providing further explanation
for its decision.
On March 1, 2024, Daugherty filed a notice of appeal in the circuit
court. (See Rec. vol. II, C. 366-70.) On March 3, 2024, Molly filed in the
circuit court a motion to strike Daugherty's notice of appeal on the ground
that the circuit court's February 15, 2024, order granting her motion to
dismiss Daugherty's complaint was not a final judgment because her
counterclaims remained pending in the circuit court. On March 5, 2024,
16 SC-2024-0142
the circuit court entered an order denying Molly's motion to strike
Daugherty's notice of appeal. In that order, the circuit court reiterated
that it had concluded in its February 15, 2024, order that the
contingency-fee arrangement in the contract was "contrary to the
Alabama Rules of Professional Conduct -- and the Client-Lawyer
Relationship, [and] is unconscionable and is against public policy." The
circuit court then concluded: "The Court FINDS that the Court's Order
Granting [Molly's] Motion to Dismiss is this Court's FINAL JUDGMENT
on [Daugherty's] Claim for Breach of Contract against [Molly].
Accordingly, [Molly's] Motion to Strike [Daugherty's] Notice of Appeal is
DENIED." (Emphasis and capitalization in original.) On March 7, 2024,
Daugherty's notice of appeal was filed in this Court.
II. Standard of Review
The circuit court clearly considered materials outside the pleadings;
the circuit court even stated in its order granting Molly's motion to
dismiss that it had taken judicial notice of the court file in the domestic-
relations case. 1 However, that fact does not require converting the motion
1Although ordinarily " '[c]ircuit courts do not take judicial notice of
the records of another court,' " neither party objected to the circuit court's taking judicial notice of filings in the domestic-relations case; indeed, 17 SC-2024-0142
to dismiss to a motion for summary judgment because "[a] trial court does
not treat a Rule 12(b)(6)[, Ala. R. Civ. P.,] motion as a summary-judgment
motion by considering authenticated documents that are attached to the
motion to dismiss if ' " 'the document[s are] referred to in the complaint
and [are] central to the plaintiff[s'] claim[s].' " ' " Newson v. Protective
Indus. Ins. Co. of Alabama, 890 So. 2d 81, 86 (Ala. 2003) (quoting
Donoghue v. American Nat'l Ins. Co., 838 So. 2d 1032, 1035 (Ala. 2002),
quoting in turn Wilson v. First Union Nat'l Bank of Georgia, 716 So. 2d
722, 726 (Ala. Civ. App. 1998), quoting in turn GFF Corp. v. Associated
Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997)). The
contract, which was attached to Daugherty's complaint, was the basis of
Daugherty's breach-of-contract claim. Moreover, filings in the domestic-
relations case, which were attached to Daugherty's response to the
motion to dismiss and to Molly's reply thereto, were central to Molly's
arguments for dismissal, which were provided in both her motion and in
her counterclaim.
both parties attached the relevant filings from that case as exhibits to their filings in the present case. Municipal Workers Comp. Fund, Inc. v. Morgan Keegan & Co., 190 So. 3d 895, 911 (Ala. 2015) (quoting Charles W. Gamble & Robert J. Goodwin, McElroy's Alabama Evidence § 484.02(2) (6th ed. 2010)). 18 SC-2024-0142
" ' " The standard of review of the grant of a motion to dismiss ... was set out in Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993):
" ' " ' On appeal, a dismissal is not entitled to a presumption of correctness. The appropriate standard of review ... is whether, when the allegations of the complaint are viewed most strongly in the pleader's favor, it appears that the pleader could prove any set of circumstances that would entitle [him] to relief. In making this determination, this Court does not consider whether the plaintiff will ultimately prevail, but only whether [he] may possibly prevail. We note that a ... dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief. ' " ' "
Waterworks & Sewer Bd. of Selma v. Allen, 3 So. 3d 846, 848 (Ala. 2008)
(quoting Helms v. Barbour Cnty., 914 So. 2d 825, 828 (Ala. 2005), quoting
in turn Jacks v. Madison Cnty., 741 So. 2d 429, 430 (Ala. Civ. App. 1999)).
III. Analysis
A. Jurisdiction of the Appeal
Before we evaluate the merits of Daugherty's appeal, it must be
determined whether we have jurisdiction over his appeal because
"jurisdictional matters are of such magnitude that we take notice of them 19 SC-2024-0142
at any time and do so even ex mero motu." Nunn v. Baker, 518 So. 2d
711, 712 (Ala. 1987).
In his brief's "Statement of Jurisdiction," Daugherty asserts that
this Court has jurisdiction of his appeal because the circuit court's
February 15, 2024, order "constituted a final judgment against all claims
and against all parties." Daugherty's brief, p. 1. In her brief's "Statement
of Jurisdiction," Molly proclaims that she "adopts [Daugherty's]
statement of jurisdiction to the extent this Honorable Court finds the
trial court's order final under Rule 54(b), Ala. R. Civ. P.,[2] as [Molly's]
counterclaim for legal malpractice remains pending." Molly's brief, p. 1.
Molly's observation highlights the potential problem: What is the
status of Molly's counterclaims? We first observe that the sequence of
events that followed the filing of Daugherty's notice of appeal on March
1, 2024 -- the filing of Molly's motion to strike Daugherty's notice of
2Rule 54(b), Ala. R. Civ. P., provides, in pertinent part:
"When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." 20 SC-2024-0142
appeal and the circuit court's entry of the March 5, 2024, order denying
Molly's motion to strike, concluding that its February 15, 2024, order was
a "final judgment on [Daugherty's] claim for breach of contract against
Molly" -- is immaterial to answering that question. (Emphasis and
capitalization omitted.) That is because "[t]he timely filing of a notice of
appeal invokes the jurisdiction of an appellate court and divests the trial
court of jurisdiction to act except in matters entirely collateral to the
appeal." Harden v. Laney, 118 So. 3d 186, 187 (Ala. 2013). The subject of
Molly's motion to strike and the circuit court's March 5, 2024, order --
whether the circuit court's February 15, 2024, order was a final judgment
-- was not a matter collateral to the appeal, and, thus, the circuit court
lacked jurisdiction to entertain and to rule on Molly's motion to strike
because the circuit court was divested of jurisdiction in the case on March
1, 2024, when Daugherty filed his notice of appeal.
Of course, we have authority to maintain jurisdiction of
Daugherty's appeal if the appeal stemmed from a final judgment or from
a judgment properly certified as final for purposes of appeal under Rule
54(b), Ala. R. Civ. P. See, e.g., Bean v. Craig, 557 So. 2d 1249, 1253 (Ala.
1990) (noting that "[a]n appeal ordinarily will lie only from a final
21 SC-2024-0142
judgment -- i.e., one that conclusively determines the issues before the
court and ascertains and declares the rights of the parties involved");
First Commercial Bank of Huntsville v. Nowlin, 122 So. 3d 829, 831 (Ala.
2013) (observing that "Rule 54(b), Ala. R. Civ. P., establishes an exception
to the general rule").
The circuit court's February 15, 2024, order was not a Rule 54(b)
order. It did not cite Rule 54(b), and it did not "use the 'no just reason for
delay' language from that rule this Court has previously recognized as
sufficient to indicate an intent to certify an order as a final order under
Rule 54(b)." Elkins v. Carroll, 220 So. 3d 290, 297 (Ala. 2016). See also
Grimmer v. Williams, 389 So. 3d 1154, 1157-58 (Ala. 2023) (observing
that "to properly certify an order as final under Rule 54(b), a trial court
must determine (1) that the action involves more than one claim, (2) that
the order completely adjudicates at least one claim, and (3) that 'no just
reason for delay' exists").
However, the circuit court's February 15, 2024, order also did not
address Molly's counterclaims against Daugherty in any way. " 'A ruling
that disposes of fewer than all claims or relates to fewer than all parties
in an action is generally not final as to any of the parties or any of the
22 SC-2024-0142
claims. ' " Elkins, 220 So. 3d at 296 (quoting Wilson v. Wilson, 736 So. 2d
633, 634 (Ala. Civ. App. 1999)). Thus, ordinarily we would not consider
the circuit court's February 15, 2024, order to be a final judgment.
However, this is not an ordinary circumstance because of the nature
of Molly's counterclaims. As we recounted in the rendition of the facts,
Molly's counterclaim asserted five counts against Daugherty. The first of
those counts sought a judgment declaring that the contract was void -- in
part on the basis that the contract inappropriately contained a
contingency-fee arrangement in a domestic-relations matter. The circuit
court effectively granted that portion of Molly's counterclaim in its
February 15, 2024, order by concluding that the contract was
unconscionable and against public policy because of the contingency-fee
arrangement that concerned the recovery of alimony payments. 3 The
other four counts in Molly's counterclaim asserted claims under the
ALAA. The Court of Civil Appeals addressed a similar situation in Keller
Construction Co. of Northwest Florida, Inc. v. Hartford Fire Insurance
3Indeed, Molly's counterclaim was her only filing in the circuit court
that posited that the contract was void because it contained a contingency-fee arrangement in a domestic-relations matter. Molly's motion to dismiss focused solely on the doctrine of res judicata. 23 SC-2024-0142
Co., 279 So. 3d 579 (Ala. Civ. App. 2018). It noted that, "[o]rdinarily, the
failure to adjudicate a pending claim would render a judgment nonfinal
and, therefore, nonappealable." Id. at 583. But the Court of Civil Appeals
determined that the counterclaim at issue "was, in essence, a claim under
the ALAA." Id. It then observed:
" '[W]hen a trial court enters an otherwise final judgment on the merits of a case but fails to address a pending ALAA claim or to reserve jurisdiction to later consider that claim, the ALAA claim is implicitly denied by the judgment on the merits.' Klinger v. Ros, 33 So. 3d 1258, 1260 (Ala. Civ. App. 2009)."
Id. See, e.g., Gonzalez, LLC v. DiVincenti, 844 So. 2d 1196, 1201-02 (Ala.
2002) ( " 'As interpreted by the supreme court, the ALAA … provides for
the trial court to consider the outcome of the proceedings in determining
whether a party's action was without substantial justification. For this
reason, it is within the court's discretion to hold a separate hearing on an
ALAA petition after the entry of final judgment on the merits, provided
that the court retained jurisdiction to do so. Meek [v. Diversified Prods.
Corp., 575 So. 2d 1100 (Ala. 1991)]. Otherwise, a final judgment puts an
end to all controversies litigated or which ought to have been litigated
within the particular controversy. Vacalis v. [Lowry], 279 Ala. 264, 184
24 SC-2024-0142
So. 2d 345 (1966). ' " (quoting Baker v. Williams Bros., 601 So. 2d 110, 112
(Ala. Civ. App. 1992))). The Court of Civil Appeals has further explained:
"To prevent the implied denial of an ALAA claim, a party may timely file a postjudgment motion directed to the judgment on the merits seeking the reservation of jurisdiction to hear the ALAA claim; if that motion is granted and the trial court reserves jurisdiction over the ALAA claim pursuant to the amended judgment, the claim survives."
Klinger v. Ros, 33 So. 3d 1258, 1261 (Ala. Civ. App. 2009).
In its February 15, 2024, order, the circuit court did not address
Molly's ALAA claims, and Molly did not file a postjudgment motion
seeking to have the circuit court reserve jurisdiction to hear her ALAA
claims. Therefore, Molly's ALAA claims were implicitly denied by the
circuit court. Because of that, the February 15, 2024, order was a final
judgment because it disposed of all the claims of all the parties.
Accordingly, we have jurisdiction of Daugherty's appeal. 4
4The Court of Civil Appeals does not have jurisdiction of this appeal
because the amount involved exceeds $50,000 and this is not an appeal from a domestic-relations case. See § 12-3-10, Ala. Code 1975. It is true that Daugherty's claim asserting entitlement to unpaid attorney fees stems from services he rendered in a domestic-relations case, but, as we recounted in the rendition of facts, that case was dismissed, and Daugherty commenced a separate action in his effort to recover what he believes he is owed from Molly. The gravamen of the current action -- the alleged breach of an attorney-client contract -- does not fall within the exclusive jurisdiction of the Court of Civil Appeals. 25 SC-2024-0142
B. The Merits of Daugherty's Appeal
As we recounted in the rendition of the facts, the circuit court
determined that the contract was void as against public policy because it
contained a contingency-fee arrangement in a domestic-relations matter.
To reach its conclusion, the circuit court relied on Rule 1.5(d)(1), Ala. R.
Prof. Cond., which prohibits attorneys from arranging for, charging, or
collecting a contingency fee "upon the securing of a divorce or upon the
amount of alimony or support, or property settlement in lieu thereof …."
Daugherty contends that the circuit court erred because "[t]he facts
of this case … fit comfortably within the exception to Rule 1.5(d) of the
Alabama Rules of Professional Conduct …." Daugherty's brief, p. 15.
Daugherty quotes from the "Preamble" of the "Discussion" section of a
Formal Ethics Opinion of the General Counsel of the Alabama State Bar,
RO-96-01, to support his argument:
"The Disciplinary Commission of the Alabama State Bar, in formal opinion RO-88-l03, concluded that a lawyer could represent a spouse on a contingent fee basis in an action for breach of an antenuptial contract, said action seeking money damages. The Commission, deciding the matter pursuant to DR 5-103(A) and EC 2-20 of the former Code of Professional Responsibility, acknowledged the pending adoption of Rule 1.5(d), Alabama Rules of Professional Conduct, and its direct prohibition of contingent fees in domestic relations matters. The Commission noted a prior 26 SC-2024-0142
opinion (RO-83-22) which had listed the only approval of a contingent fee contract in a domestic relations matter, that being collection of child support or alimony arrearage in a completed divorce."
J. Anthony McLain, Opinions of the General Counsel, 57 Ala. Law. 151
(May 1996) (emphasis added).
Based on the emphasized language in the foregoing portion of
formal opinion RO-96-01, Daugherty argues that the contingency-fee
arrangement in the contract was proper because it concerned the
collection of alimony arrearage after a completed divorce, the terms of
which were memorialized in the August 19, 2014, divorce settlement
agreement between Christopher and Molly. Of course, an opinion of the
General Counsel of the Alabama State Bar is not binding on the Alabama
courts, and Daugherty does not provide any other Alabama authority in
support of his position. Instead, Daugherty cites and quotes from Davis
v. Taylor, 81 N.C. App. 42, 344 S.E.2d 19 (1986), but the exceptions Davis
discussed are not directly on point with the situation presented here. See
Davis, 81 N.C. App. at 47, 344 S.E.2d at 22 (stating that "contingent-fee
arrangements generally are permitted in actions by one spouse to recover
separate property from another or to settle property rights among them").
Therefore, Daugherty provided insufficient legal authority to warrant a 27 SC-2024-0142
reversal of the circuit court's judgment. See Rule 28(a)(10), Ala. R. App.
P.
But even if Daugherty had provided sufficient legal authority for
his position, the exception upon which he relies would not apply in this
instance. As Molly observes, Daugherty did not just represent her with
respect to her petition for a rule nisi; he also willingly represented Molly
with respect to Christopher's petition to modify his monthly alimony
payments. Despite that change in the status of his representation,
Daugherty did not change the terms of the contract with Molly.
Consequently, Daugherty had contracted for a contingency fee not just
with respect to the collection of an alimony arrearage, but also with
respect to "the amount of alimony" due to Molly on an ongoing basis. Rule
1.5(d)(1), Ala. R. Prof. Cond. In other words, the exception to Rule
1.5(d)(1) upon which Daugherty relies did not apply to his situation.5
5In his reply brief, Daugherty cursorily argues that although he
offered to represent Molly with respect to Christopher's petition to modify his alimony payments, Molly "elected to terminate Appellant Attorney Daugherty before Appellant Attorney Daugherty and [Molly] could extend the attorney/client contract to include the additional legal services." Daugherty's reply brief, p. 2. However, as we recounted in the rendition of facts, that argument is directly contrary to the facts in the record. In his responses to requests for admissions, Daugherty openly admitted that he had agreed to represent Molly with regard to all aspects 28 SC-2024-0142
Therefore, based on the argument Daugherty has presented, the circuit
court did not err in concluding that the contingency-fee arrangement in
the contract was against public policy.
We take this opportunity to note, however, that Daugherty
apparently failed to notice the following admonition this Court provided
in Poole v. Prince, 61 So. 3d 258, 280-82 (Ala. 2010):
"The Scope to the Rules of Professional Conduct states, in part:
" 'Violation of a Rule should not give rise to a cause of action nor should it create any presumption that a legal duty has been breached. The Rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability. Furthermore, the purpose of the Rules can be subverted when they are invoked by opposing parties as procedural weapons. The fact that a Rule is a just basis for a lawyer's self-assessment, or for sanctioning a lawyer under the administration of a disciplinary authority, does not imply that an antagonist in a collateral proceeding or transaction has standing to seek enforcement of the Rule. Accordingly, nothing in the Rules should be deemed to augment any substantive legal duty of lawyers or the extra- disciplinary consequences of violating such a duty.'
of the domestic-relations case and that he had done so without modifying the terms of his representation. 29 SC-2024-0142
"… The power to declare a contract void based on a violation of public policy ' "is a very delicate and undefined power and, like the power to declare a statute unconstitutional, should be exercised only in cases free from doubt. " ' Milton Constr. Co. v. State Highway Dep't, 568 So. 2d 784, 788 (Ala. 1990) (quoting 17 Am Jur.2d Contracts § 178 (1964)). ' "The courts are averse to holding contracts unenforceable on the ground of public policy unless their illegality is clear and certain.... [T]he courts will not declare an agreement void on the ground of public policy unless it clearly appears to be in violation of the public policy of the state. " ' Id. (emphasis omitted).
"We conclude that the trial court erred to the extent that it determined the parties' agreement to be unenforceable as violative of Rule 1.5(e), Ala. R. Prof. Cond.[6] As discussed in the Scope of the Alabama Rules of Professional Conduct and in the above-cited authorities, the sole remedy for a violation of Rule 1.5(e) is disciplinary in nature; therefore, the trial court lacked the authority to declare the parties' agreement unenforceable as violative of Rule 1.5(e)."
(Some emphasis in original; some emphasis added.)
Although the facts in Poole involved the application of Rule 1.5(e),
rather than Rule 1.5(d), its rationale dictates that a court should not
declare void an agreement between parties based on the violation of a
Rule of Professional Conduct because those rules are intended for the
discipline of attorneys, not for civil liability or defense. But, as we have
6Rule 1.5(e), Ala. R. Prof. Cond., addresses the division of a fee between lawyers who are not in the same law firm. 30 SC-2024-0142
noted, Daugherty did not cite Poole or the principles it contains in the
circuit court or in his appellate briefs. "It is well settled that an appellate
court may not hold a trial court in error in regard to theories or issues
not presented to that court." Allsopp v. Bolding, 86 So. 3d 952, 962 (Ala.
2011). Accordingly, we will not reverse the circuit court's judgment based
on the principles enunciated in Poole. We simply reiterate them to
remind courts to be careful how they employ the Alabama Rules of
Professional Conduct.
Even if Daugherty had correctly refuted the circuit court's basis for
the dismissal of his breach-of-contract claim, his claim had another
inherent weakness. "[O]ur caselaw provides that where the written
attorney-fee agreement contemplates compensation for the attorney in
the event of a settlement of the litigation involving his clients, the terms
of that attorney-fee agreement control to determine the amount of the
attorney's lien available under § 34-3-61, Ala. Code 1975." 7 Harlow v.
7Section 34-3-61, Ala. Code 1975, is the attorney lien-statute. This
Court has stated that "the purpose of the attorney's lien statute, § 34-3- 61, Code of Ala. 1975, is to protect the attorney from loss of his investment in time, effort, and learning, and the loss of funds used in serving the interest of the client." Triplett v. Elliott, 590 So. 2d 908, 910 (Ala. 1991). It is apparent from Daugherty's filings below that his breach- of-contract claim was based on § 34-3-61. 31 SC-2024-0142
Sloss Indus. Corp., 813 So. 2d 879, 889 (Ala. Civ. App. 2001) (emphasis
added). The contract did not contain a provision stating that Daugherty
was entitled to compensation in the event Molly and Christopher reached
a settlement of their differences. The contract specifically provided: "The
fee for such services shall be a contingency of: 1/4 of any and all recovery
of amounts Chris Baker agreed to give Molly with regard to divorce
settlement of Jefferson County divorce case #: DR-2014-900024 after all
expenses have been reimbursed." (Emphasis added.) Molly did not
recover any amount from Christopher in the domestic-relations case. The
only provision of the contract that could be said to support a recovery is
the second to last paragraph of the contract, which stated: "[Molly] agrees
to pay a reasonable attorney fee and the costs of collection in the event
this debt has to be collected due to the default of [Molly] as a result of
[her] failure to pay any monies due under this contract." (Emphasis
added.) But because there was no "recovery of amounts Chris Baker
agreed to give Molly with regard to" the August 19, 2014, divorce
judgment, the only money that could be said to be "due under this
contract" would be legal expenses. That is because of another contract
provision that stated that "court costs, … duplicating costs, filing fees,
32 SC-2024-0142
[and] investigator's fees … incurred on [Molly's] behalf, … when
advanced by [Daugherty], will be borne by and paid for by [Molly]," and
Daugherty alleged in his complaint that Molly "ha[d] contributed no
money to pay any expenses regarding the filing of [the petition for a rule
nisi in the domestic-relations case], obtaining service on [Christopher] or
any other expense which has come due with regard to that case." In his
postjudgment motion, Daugherty estimated that his litigation expenses
totaled $727.83, a far cry from the $113,752.27 in total damages
Daugherty sought for his breach-of-contract claim in the same motion.
Daugherty argues that even if the contract "is not enforceable on a
contingency basis, Attorney Daugherty should be entitled to his legal fees
based on quantum meruit." Daugherty's brief, p. 16. Daugherty cites and
quotes several legal authorities for the proposition that an attorney
whose services are terminated before the conclusion of litigation and who
was due to be compensated on a contingency-fee basis is entitled to
payment for services rendered. For example, in Triplett v. Elliott, 590 So.
2d 908, 910 (Ala. 1991), this Court stated:
"It is well established in Alabama that upon an attorney's discharge, the prior part performance of a contract entitles the attorney to recover for those services rendered. As the Court of Civil Appeals pointed out in Gaines[, Gaines & 33 SC-2024-0142
Gaines, P.C. v. Hare, Wynn, Newell & Newton, 554 So. 2d 445 (Ala. Civ. App. 1989)]:
" ' "The rule in Alabama is that an attorney discharged without cause, or otherwise prevented from full performance, is entitled to be reasonably compensated only for services rendered before such discharge. Hall v. Gunter, 157 Ala. 375, 47 So. 155 [(1908)]. This appears to be the prevailing rule where the contract, as here, called for a contingent fee. 6 C.J. p. 724, § 293." Owens v. Bolt, 218 Ala. 344, 348, 118 So. 590 (1928).'
"554 So. 2d at 448."
There are at least three problems with Daugherty's quantum
meruit argument. First and foremost, as Molly observes, Daugherty
never pleaded quantum meruit as an alternative basis for the recovery of
attorney fees: Daugherty's complaint solely asserted a claim of breach of
contract based on the terms of the contract. Daugherty first asserted a
right to recovery based on quantum meruit in his postjudgment motion.
But Daugherty cannot have it both ways: either Daugherty's
postjudgment motion was, in substance, a motion to amend his
complaint, following the circuit court's dismissal of his original
complaint, or Daugherty's postjudgment motion was, as it was labeled, a
postjudgment motion seeking reconsideration of the basis on which his
breach-of-contract claim was dismissed. See, e.g., Morris v. Merchants 34 SC-2024-0142
Nat'l Bank of Mobile, 359 So. 2d 371, 373 (Ala. 1978) (concluding that a
postjudgment motion following the entry of a summary judgment was, in
substance, a motion to amend the complaint rather than a motion to
seeking to have the trial court reexamine the evidence). Viewed as a
whole, Daugherty's postjudgment motion was clearly asking the circuit
court to reexamine its basis for dismissal by citing to an exception to the
Alabama Rules of Professional Conduct's general prohibition on
contingency-fee arrangements by attorneys in domestic-relations cases.
In other words, Daugherty was not seeking permission from the circuit
court to amend his complaint, and the circuit court cannot be faulted for
not viewing his postjudgment motion as seeking such permission when it
denied Daugherty's motion. Because Daugherty never properly amended
his complaint to include a claim for recovery based on quantum meruit,
we will not reverse the circuit court's judgment on that basis.
Second, Daugherty's new claim for recovery under the theory of
quantum meruit contradicts his argument that he has an attorney lien
based on the contract.
"Pursuant to § 34-3-61, Ala. Code 1975, and its predecessors, an attorney may establish his right to an attorney-fee lien either through contract or on the theory of quantum meruit. Carnes v. Shores, 55 Ala. App. 608, 318 So. 35 SC-2024-0142
2d 305 (Ala. Civ. App. 1975). See also Triplett v. Elliott, [590 So. 2d 908 (Ala. 1991)]; Gaines, Gaines & Gaines, P.C. v. Hare, Wynn, Newell & Newton, 554 So. 2d 445 (Ala. Civ. App. 1989). Harlow has claimed an attorney-fee lien pursuant to his contract with the clients; therefore, he has not argued the theory of quantum meruit before the trial court or before this court. An express contract between the parties generally precludes the existence of an implied agreement relative to the same subject matter. Betts v. McDonald's Corp., 567 So. 2d 1252 (Ala. 1990)."
Harlow, 813 So. 2d at 887 (emphasis added). The foregoing rule perhaps
explains why Daugherty did not initially plead quantum meruit as a
basis for recovery.
Third, Daugherty's claim for recovery based on quantum meruit
ignores the limitations on such a claim. " 'The rule in Alabama is that an
attorney discharged without cause, or otherwise prevented from full
performance, is entitled to be reasonably compensated only for services
rendered before such discharge. ' " Gaines, Gaines & Gaines, P.C. v. Hare,
Wynn, Newell & Newton, 554 So. 2d 445, 448 (Ala. Civ. App. 1989)
(quoting Owens v. Bolt, 218 Ala. 344, 348, 118 So. 590, 594 (1928))
(emphasis added). Daugherty's calculations of damages are based on
what he claimed was "a minimum [Molly] would be entitled to [in] a
judgment if tried as set out and described in detail on the 'Trial Brief'
Daugherty prepared to argue and submit on 8/17/2021." Daugherty's 36 SC-2024-0142
brief, p. 12. In other words, Daugherty sought damages based on what
Molly might have recovered from Christopher if the petition for a rule
nisi had gone to trial -- something that never occurred because Molly and
Christopher moved for and received a joint dismissal of their respective
petitions. Thus, Daugherty's new quantum meruit claim -- and his
original breach-of-contract claim for that matter -- did not solely seek
compensation for services rendered before discharge but, rather, sought
damages for what might have been recovered in the event of successful
litigation at trial. Consequently, even if Daugherty had properly pleaded
his quantum meruit claim, and even if it could have been permitted in
the alternative to his breach-of-contract claim, the claim would have been
much more limited than what was claimed in his postjudgment motion.
IV. Conclusion
The circuit court dismissed Daugherty's breach-of-contract claim
against Molly on the basis that the contract was void for public policy
because the contract contained a contingency-fee arrangement in a
prohibited domestic-relations context. Daugherty did not present to the
circuit court or to this Court sufficient Alabama authority that refuted
the application of that prohibition, particularly given that the exception
37 SC-2024-0142
to the contingency-fee prohibition upon which Daugherty relied did not
apply to his situation once he had agreed to represent Molly with respect
to Christopher's petition to modify his alimony payments. Daugherty
never pleaded his alternative quantum meruit claim, and thus that is not
a proper legal basis for reversing the circuit court's judgment.
Accordingly, the circuit court's judgment is due to be affirmed.
AFFIRMED.
Parker, C.J., and Wise, Bryan, Sellers, Stewart, and Cook, JJ.,
concur.
Mitchell, J., concurs in part and concurs in the result, with opinion.
Shaw, J., concurs in the result.
38 SC-2024-0142
MITCHELL, Justice (concurring in part and concurring in the result).
The Jefferson Circuit Court held that attorney John A. Daugherty's
contract with Molly Chew Baker "was void as against public policy
because it contained a contingency-fee arrangement in a domestic-
relations matter." ___ So. 3d at ___. While there is some authority
indicating that "a court should not declare void an agreement between
parties based on the violation of a Rule of Professional Conduct," ___ So.
3d at ___ (citing Poole v. Prince, 61 So. 3d 258, 280-82 (Ala. 2010),
Daugherty failed to cite that authority to the trial court. And because it
is the appellant's duty to show that the trial court erred, see Arthur v.
Bolen, 41 So. 3d 745, 750 (Ala. 2010), and because we will not "hold a
trial court in error in regard to theories or issues not presented to [it],"
Allsopp v. Bolding, 86 So. 3d 952, 962 (Ala. 2011), Daugherty has failed
to meet his burden of demonstrating error below. Accordingly, we must
affirm the trial court's judgment.
I concur in the result only as to the other matters discussed in the
majority opinion -- specifically, whether the Rules permit Daugherty's
contingency-fee arrangement, what he would be owed under that
39 SC-2024-0142
arrangement, or the merits of his forfeited quantum meruit claim --
because those matters are not necessary to decide this appeal.