Philipbar v. Philipbar

1999 NMCA 063, 980 P.2d 1075, 127 N.M. 341
CourtNew Mexico Court of Appeals
DecidedApril 21, 1999
Docket19,311
StatusPublished
Cited by8 cases

This text of 1999 NMCA 063 (Philipbar v. Philipbar) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Philipbar v. Philipbar, 1999 NMCA 063, 980 P.2d 1075, 127 N.M. 341 (N.M. Ct. App. 1999).

Opinion

OPINION

BOSSON, Judge.

{1} Raising issues of first impression, this appeal challenges the district court’s equitable authority in a domestic relations suit to void an attorney’s charging lien recorded on the parties’ residence and, once that property sells, to allocate the proceeds in a manner that pays court-appointed experts before satisfying attorney charging hens on the proceeds. We hold that the trial court properly exercised its equitable discretion, and accordingly, we affirm and remand for further proceedings.

BACKGROUND

{2} Renee K. Philipbar (Wife) sought a divorce from Brian A. Philipbar (Husband). Husband hired Behles-Giddens, P.A. n/k/a J.D. Behles & Associates, P.C. (hereinafter sometimes referred to as “Husband’s attorney” or “Behles”) on January 22, 1996, and executed a written agreement authorizing an attorney’s charging lien against any funds or properties recovered or preserved as a result of his attorney’s efforts.

{3} Because child custody was contested and the parties had difficulty complying with interim child custody arrangements, the court appointed a Rule 11-706 NMRA 1999 expert (706 Expert) on May 2, 1996, to aid the court in its custody determination. The court also appointed a guardian ad litem (GAL) for the parties’ four children, in particular for the benefit of one child who was resisting the interim custody order.

{4} At the time of their appointment, the court ordered that the GAL and the 706 Expert were to be paid from the sale proceeds of the parties’ residence which were to be deposited in the court registry when the residence sold. At that time, all interested parties and the court believed the residence would sell for a price sufficient to pay for the experts as well as satisfy other expenses such as attorney fees. As it turned out, they were wrong. Wife, Wife’s attorney, Husband, and Husband’s attorney all agreed to the court-appointed experts. Husband’s attorney did not object to the court’s order to pay the GAL and the 706 Expert from the sale proceeds, nor was the court informed that the attorney might assert a charging lien against either the residence or the proceeds.

{5} On February 6, 1997, Behles filed a “Notice of Attorneys’ Charging Lien” in the district court clerk’s office and sometime later, recorded a similar notice of lien against the residence in the real property records of the county clerk’s office. A copy of the notice was mailed to Wife’s attorney, to Husband, and to the GAL, but not to the 706 Expert. Wife’s attorney filed a similar notice of a charging lien pertaining to legal services provided to Wife.

{6} Shortly after learning of Behles’ charging lien against the residence, the GAL formally objected, arguing that there would not be sufficient proceeds to pay the court-appointed experts if the attorneys were paid first. On June 14, 1997, Husband informed Behles that he no longer wished to retain her law firm because the anticipated proceeds from the sale of the house would not be enough to pay Behles along with the GAL and 706 Expert. Husband also indicated in his letter that Behles would have to look to these same sale proceeds for payment of the firm’s outstanding bill.

{7} On January 15, 1998, after the residence had been on the market for over a year, Husband requested court approval to accept an offer of purchase. Because of a poor housing market, the offer was approximately $85,000 less than the parties had originally anticipated, and this was not likely to be enough to pay all the fees of the court-appointed experts, much less the parties’ attorney fees. Approving the sales price nonetheless, the court required all proceeds to be deposited in the court registry so that the court could order disbursement upon submission of final statements.

{8} As the prospect of a sale grew closer, it became apparent that the recorded liens of the respective law firms clouded the title, and to avoid frustrating the sale, they would have to be either paid or removed as liens from the title. On February 20, 1998, the GAL filed a motion to void the charging liens with respect to the residence which would allow the sale to proceed and the proceeds transferred into the court registry. Behles resisted. On February 24, 1998, with all interested parties present, the court voided the charging liens of both law firms on the residence. The court ordered that the net sale proceeds, then estimated at only $23,500, were to be paid into the court registry without condition and that the attorneys were not to make any further attempt to collect against the real property. The court noted that the court-appointed experts were awaiting payment from the court for their services, and that their fees were estimated at amounts exceeding the anticipated net sale proceeds. Behles appeals the court’s order voiding her charging lien.

DISCUSSION

{9} Behles argues that the district court exceeded its authority by voiding a recorded attorney’s charging lien on Husband’s interest in the real property. We review the court’s decision to remove the charging lien for an abuse of its equitable discretion. See Northern Pueblos Enters. v. Montgomery, 98 N.M. 47, 49, 644 P.2d 1036, 1038 (1982) (finding no abuse in the trial court’s exercise of its equitable powers over attorney charging liens). In New Mexico, attorney charging liens are governed by common-law, equitable principles. See Sowder v. Sowder, 127 N.M. 114, 117, 977 P.2d 1034, 1037 (Ct.App.1999); Cherpelis v. Cherpelis, 1998-NMCA-079, ¶ 8, 125 N.M. 248, 959 P.2d 973. The charging lien provides an equitable remedy intended to protect attorneys from unscrupulous clients looking to evade their responsibility for attorney fees. See Cherpelis, 1998-NMCA-079, ¶8, 125 N.M. 248, 959 P.2d 973. Administration and enforcement of charging liens is subject to the sound discretion of the trial court. See id. ¶ 9; Prichard v. Fulmer, 22 N.M. 134, 145, 159 P. 39, 42 (1916).

{10} In a dissolution of marriage proceeding the district court maintains jurisdiction over the property of the parties; it divides the property between the parties, and has full discretion to make orders relative to the expenses of the proceeding. See NMSA 1978, §§ 40-4-4, -7(A) (1973). The district court may also appoint experts and provide for their reasonable compensation. See Rule 11-706(A) & (B) NMRA 1999; NMSA 1978, § 40-4-8(A) (1993); see also In re Adoption of Stailey, 117 N.M. 199, 205, 870 P.2d 161, 167 (Ct.App.1994) (“The court is clothed with broad discretion under [Rule 11-706(B)] in apportioning among the parties the costs of an expert witness appointed by the court.”). This judicial power inherently includes the right, and the responsibility, to secure the payment of court-appointed experts particularly in the face of limited financial resources. When necessary, the court may have to grant its experts a priority over conflicting claims, including those of attorneys with charging liens. Such authority is essential to the fair and orderly administration of justice in domestic relations matters.

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Bluebook (online)
1999 NMCA 063, 980 P.2d 1075, 127 N.M. 341, Counsel Stack Legal Research, https://law.counselstack.com/opinion/philipbar-v-philipbar-nmctapp-1999.