Mullendore v. Mullendore

527 F.2d 1031
CourtCourt of Appeals for the Tenth Circuit
DecidedDecember 31, 1975
Docket74--1778
StatusPublished
Cited by2 cases

This text of 527 F.2d 1031 (Mullendore v. Mullendore) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mullendore v. Mullendore, 527 F.2d 1031 (10th Cir. 1975).

Opinion

527 F.2d 1031

In the Matter of Kathleen Boren MULLENDORE and Katsy
Mullendore Mecom, Executrix of the Estate of
Eugene C. Mullendore, Deceased, Debtors.
Gene STIPE and Willand M. Gotcher, Appellants and Cross-Appellees,
v.
Kathleen Boren MULLENDORE and Katsy Mullendore Mecom,
Executrix of the Estate of Eugene C. Mullendore,
Deceased, Appellees and Cross-Appellants.

Nos. 74--1778, 74--1779.

United States Court of Appeals,
Tenth Circuit.

Argued July 10, 1975.
Decided Dec. 31, 1975.

Irvine E. Ungerman, Tulsa, Okl., for appellants and cross-appellees.

Segal V. Wheatley, San Antonio, Tex., for appellees and cross-appellants.

Before CLARK,* Associate Justice, and HILL and BARRETT, Circuit judges.

HILL, Circuit Judge.

This case presents questions resulting from an order of the United States District Court for the Northern District of Oklahoma awarding attorneys' fees of $365,000 to appellants, Gene Stipe and Willard Gotcher, and their two associates, Howard Edmondson1 and Irvine Ungerman. These fees were awarded for the services of the four attorneys in representing Eugene and Kathleen Mullendore (hereinafter the 'senior Mullendores'), debtors not in possession,2 in a Chapter XI proceeding.

On November 5, 1970, appellants were employed by the senior Mullendores to collect all or as much as possible of the proceeds of life insurance policies having a combined face value of $15 million. These policies had insured the life of the senior Mullendores' deceased son, E. C. Mullendore, III. The policies were all owned by the son's wife, Linda, and she was designated as the beneficiary. At this time, the senior Mullendores were confronted with large debts held by both secured and unsecured creditors. Appellants received no retainer and no written agreement of any fee arrangement was made.

Appellants proceeded to work on the problem. On December 15, 1970, an agreement with Linda and the senior Mullendores was executed and provided, inter alia, that Linda would retain $5 million of the life insurance proceeds and the remainder would go to the senior Mullendores. On April 15, 1971, the senior Mullendores and their daughter and her husband, Katsy and John Mecom, Jr., executed an agreement with appellants concerning the attorneys' fees. That agreement provided, inter alia, that appellants would receive 20% of the amount recovered from an action against the insurance companies and Linda Mullendore. Also on April 15, 1971, a Chapter XI petition was filed on behalf of the senior Mullendores by appellants and Edmondson (now associated in the matter with an understanding he would share in the contingent fee arrangement). Two secured creditors had claims for over $8 million. Because of the complexity of the matters, appellants and Edmondson hired Ungerman, who had extensive experience in bankruptcy matters; Ungerman was to be paid by the other three attorneys regardless of the litigation's outcome.

Amended pleadings were filed on April 27, 1971, to effectuate the strategy decided upon: proceed under Chapter XI and have the secured creditors restrained by court orders. The district court appointed co-receivers in an order filed on May 11, 1971.

Linda had renounced the agreement with the senior Mullendores and had brought suit upon the insurance policies. The attorneys for the debtors sought to intervene in those suits and were successful, as were the receivers.3 Subsequently, Linda was prevailed upon to reaffirm the contract.4 It had become apparent that the maximum possible liability on the insurance policies would be $10 million. After negotiations, a settlement agreement for $8 million was approved. This decreased recovery meant that a new agreement with Linda had to be effected.

On December 22, 1971, a new agreement was entered into by the receivers, the senior Mullendores, and Linda. Under this new agreement, Linda received $3 million and the receivers were given $5 million. Title to all land acquired and held in the names of E. C. Mullendore, III, or any of his children when E. C. died was to be conveyed to the receivers. Linda disclaimed all right, title and interest to all livestock, farm products, equipment and other personalty used in connection with the ranches. All contractual rights relating to the ranching and farming operations were assigned or transferred to the receivers. Linda disclaimed all right, title and interest in the proceeds from the liquidation of a quarter horse operation. In exchange, the receivers and senior Mullendores agreed to pay, inter alia, the following obligations: all claims secured by valid assignments of interests in the insurance policies; all obligations incurred by Linda prior to E. C.'s death; all obligations owed by E. C. and his estate which Linda was liable for either jointly or severally; all remaining obligations of E. C. and his estate; all taxes of E. C. or Linda due or owing at the time of E. C.'s death and all taxes due upon or since his death, or to become due, which would be owed by E. C.'s estate or for which Linda or her property might be liable; all expenses previously or subsequently incurred in connection with the ranching operations; and unpaid expenses of administration of the estate of E. C.

A modified Chapter XI plan was presented on June 17, 1973. This plan called for the debtors' taking out a $4 million loan secured by a mortgage on the remaining 35,000 acres of the ranch. A long-term lease would service this debt and provide the senior Mullendores with an annual income. All creditors would be paid. The plan was approved by the court.

On August 6, 1973, appellants filed an amended application for an allowance of $1 million for attorneys' fees. The request was based on 20% of the $5 million insurance recovery and the 6,168 hours expended by all four attorneys. The application stated that approximately $40,000 of expenses were unpaid. On September 5, 1973, the senior Mullendores and the Mecoms, through other counsel,5 filed a response and brief challenging the application. A hearing was held; before evidence was presented on this application, the trial judge indicated the contingent fee contract would not be considered in arriving at a fee because of 18 U.S.C. § 155 and 11 U.S.C. § 96(d), and that the allowance would be considered on a quantum meruit basis.6 Following the evidence, the trial judge allowed interim fees and took under advisement the determination of the full fee allowance. Interim fees were again allowed on May 17, 1974. On August 27, 1974, additional fees were allowed which brought the total allowance to $365,000, which the trial judge determined would be the total allowed on the application of appellants.

We first consider the cross-appeal because an adverse determination to appellants on any of the grounds asserted therein would dispose of the entire controversy. Cross-appellants, Kathleen Mullendore and Katsy Mecom, claim the trial court erred in awarding appellants any fees.

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