Nichols v. Nichols

2009 OK 43, 222 P.3d 1049, 2009 Okla. LEXIS 48, 2009 WL 1762240
CourtSupreme Court of Oklahoma
DecidedJune 23, 2009
Docket103,950
StatusPublished
Cited by21 cases

This text of 2009 OK 43 (Nichols v. Nichols) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nichols v. Nichols, 2009 OK 43, 222 P.3d 1049, 2009 Okla. LEXIS 48, 2009 WL 1762240 (Okla. 2009).

Opinions

[1052]*1052OPALA, J.

T1 The dispositive issue on certiorari is whether the Court of Civil Appeals erred in reversing the trial court's order. We answer in the affirmative.

I

THE ANATOMY OF LITIGATION

12 Riggs, Abney, Neal, Turpen, Orbison and Lewis (Law Firm) represented Gayle Nichols (wife or client) in her divorcee case. After the divorcee was granted, Law Firm filed on behalf of its client an amended application for an attorney's fee and costs in the total amount of $151,991.12.2 In June 1999 the trial court awarded to the wife for her attorney's fee and costs the amount of $37,383.38 for the discharge of her lability to legal counsel.3 The award was made to the wife by the following words:

* * Court, having beard the testimony of Plaintiff and Defendant's respective counsel, having reviewed the verified pleadings, hearing arguments and stipulation of counsel and being fully advised in the premises finds and ORDERS judgment for the Plaintiff for attorney fees of $34,784.50 and costs in the amount of $2,598.88 for a total judgment in the sum of $37,383.38. * * *
IT IS FURTHER ORDERED, ADJUDGED AND DECREED by the Court that the Plaintiff is awarded a judgment against the Defendant, ORVILLE B. NICHOLS, II, for her attorney fees and costs in the total sum of Thirty Seven Thousand Three Hundred Eighty Three and Thirty Eight One Hundredths Dollars ($37,383.38) all for which execution may issue.

Law Firm later withdrew from representation because of a dispute over the counsel fee.4 It originally gave notice of its attorney's lien upon the entry of appearance and later upon its application to withdraw.

3 In February 2000 the wife filed a voluntary bankruptcy and obtained a discharge on September 12 of that year.5 She listed on her bankruptcy schedule Law Firm's claim for an attorney's fee and costs as an unsecured debt.

T4 In June 2004 the wife renewed6 the counsel-fee award and brought proceedings against her husband to collect that award. On 10 March 2005, shortly after learning about the wife's collection efforts but before any money had come into her hands, Law Firm moved to enforce its charging lien. Law Firm claimed that (a) it had a valid and enforceable lien upon the award as well as a prior claim to all funds that may come into the wife's hands by her collection efforts; (b) the efficacy of the lien is subject to the time limit set by the attorney's lien statute, 5 ©.S.2001 § 8,7 and the lien may be enforced within one year after the attorney becomes [1053]*1053aware that the party to whom the judgment is granted attempts to compromise or settle the judgment without the consent of counsel; and (c) it timely complied with the § 8 time limit by the 10 March 2005 filing of its motion to enforce the lien. Law Firm claims that on 7 March 2005 it was informed by husband's counsel of wife's collection efforts.8 The wife countered that Law Firm's charging lien is unenforceable because the underlying obligation for the attorney's fee is barred by laches, the running of the statute of limitations found in 12 0.8.2001 § 959 and her discharge in bankruptcy.

15 The trial court initially made a finding of fact that the bankruptey trustee had abandoned any claim the bankrupt might have to the counsel-fee award.10 This finding was incorporated in its decisional disposition holding that Law Firm had an enforceable charging lien in the fee award. Wife brought an appeal from the trial court's order.

II

COCA'S OPINION AND THE PARTIES CERTIORARI ARGUMENTS

The Court of Civil Appeals' Reversal

T6 The Court of Civil Appeals (COCA) reversed the trial court's order. Its decision rests on the view that the charging lien was barred by the running of the statute of limitations on the underlying debt to the Law Firm. COCA reasons that because Law Firm's action to enforee its charging lien was filed more than five years after the firm's last date of representation, the underlying debt for the attorney's fee that the lien secured was barred by the five-year statute of limitations for written contracts in 12 0.8. 2001 § 9511 and the lien provisions of 42 ©.§8.2001 § 23,12 rather than the one-year limitation period of 5 0.98.2001 § 8. Because its reversal was based solely on a time bar, COCA did not deal with any other challenges to the trial court's decision.

The Parties' Certiorari Arguments

17 Law Firm argues COCA erred in applying to the claim the statute of limitations in 12 0.S8.2001 § 95 and the general lien provisions of 42 0.8.2001 § 23 in concluding that its charging lien was unenforceable. According to Law Firm (a) these statutes are not applicable to an attorney's charging lien; (b) the Legislature carved out of the general lien statute the category of attorneys' charging liens and provided in 5 0.8.2001 §§ 613 [1054]*1054and 8 a specific method for their enforcement; and (c) its motion to enforce the lien was timely brought.

T8 Wife counters that COCA correctly determined (a) the provisions of 5 0.8.2001 § 8 do not create an exception to the generally applicable statute of limitations and (b) the attorney's charging lien stands extinguished when the claim for the underlying debt becomes time barred.

19 We granted certiorari on Law Firm's quest for corrective relief and now vacate COCA's opinion, affirm the trial court's disposition on a theory different from that on which it was rested below and, for the reasons to be stated, remand the cause for further proceedings to be consistent with today's pronouncement.

§10 An appellate court has a common-law duty to affirm a trial judge's decision if it can be supported by any applicable legal theory.14 We need not reach for discussion Law Firm's lien theory. Another analysis is fully explanatory of Law Firm's rights and provides ample basis for the trial court's disposition.

III

THE COUNSEL-FEE AWARD IN FAVOR OF THE WIFE (AND ANY MONEY THAT COMES INTO HER HANDS IN PAYMENT OF THAT AWARD) IS IMPRESSED BY OPERATION OF LAW BY A CONSTRUCTIVE TRUST FOR THE BENEFIT OF THE SERVICE-RENDERING LAW FIRM

A.

Law Firm Has A Beneficial Interest In the Constructive Trust Impressed By Operation of Law On the Counsel-Fee Award

111 When an award for an attorney's fee is made directly to the client who is a party,15 a constructive trust attaches eo instante by operation of law to the award16 for the benefit of the lawyer who performed the services for which compensation is allowed. The legal entitlement to the award goes to the client, but the beneficial interest is created in favor of the lawyer. The client stands as a constructive trustee and the lawyer as a constructive beneficiary (cestui que trust).17 It is the dual title-the split[1055]*1055ting of title into legal and equitable components-that creates the constructive trust.

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Cite This Page — Counsel Stack

Bluebook (online)
2009 OK 43, 222 P.3d 1049, 2009 Okla. LEXIS 48, 2009 WL 1762240, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nichols-v-nichols-okla-2009.