Stone v. DuBarry

513 S.W.3d 325, 2016 WL 7655702, 2016 Ky. LEXIS 557
CourtKentucky Supreme Court
DecidedDecember 15, 2016
Docket2015-SC-000040-DG
StatusPublished
Cited by3 cases

This text of 513 S.W.3d 325 (Stone v. DuBarry) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stone v. DuBarry, 513 S.W.3d 325, 2016 WL 7655702, 2016 Ky. LEXIS 557 (Ky. 2016).

Opinions

OPINION OF THE COURT BY

JUSTICE NOBLE

The Jefferson Circuit Court, Family Division, set aside an attorney fee lien filed by attorney Thomas K. Stone on what had been the marital residence of Pennie and John DuBarry, who had filed for divorce. The Court of Appeals affirmed. This Court granted discretionary review to address whether KRS 376.460, known as the attorney’s lien statute, creates an enforceable statutory attorney fee lien in dissolution actions. Having reviewed the record and the arguments of the parties, we conclude that it does not, although a contractual lien may apply to the assets of the client after entry of a decree. This Court therefore affirms the Court of Appeals.

I. Background

The parties do not dispute the underlying facts. Pennie and John were married on September 3, 1978. Pennie filed a petition for dissolution of that marriage on May 9, 2013. At the time Pennie filed her petition, she was represented by Stone. The “Employment Contract with Escrow” between Stone and Pennie stated, in pertinent part that:

Client hereby grants a lien to Attorney on all Client’s assets, now owned and hereafter acquired to secure payment of all sums becoming due hereunder to Attorney. In the event that any portion of the Attorney’s fees or costs are outstanding after demand for payment and litigation shall become necessary to collect said fees and costs, Client agrees to pay all costs of litigation, including a reasonable attorney’s fee for said litigation.

John and Pennie entered into a property settlement agreement on August 7, 2013, which Stone helped negotiate. The agreement provided: “John shall retain the marital residence. He shall refinance and remove Pennie from liability and pay Pen-nie $20,000.00 for her interest therein. Pennie shall vacate the residence on or before 30 days following her receipt of the $20,000.00. She shall quitclaim her interest to John.” The agreement also provided the parties were responsible for their own attorney’s fees, except for $1,500 that John agreed to pay to Pennie’s attorney. At no point during the negotiations did Stone indicate that he had a contractual lien against Pennie’s property as security for his attorneys fees.

On August 14, 2013, the court entered a decree of dissolution, which incorporated the property settlement agreement. The effect of this decree was to make the terms of the property settlement agreement the orders of the court, after review and approval by the court. On August 28, 2013, Stone filed a motion seeking leave to withdraw as counsel for Pennie and a Notice of Attorney’s Lien and Intent to Hold Property Liable. The Notice indicated that Stone intended “to hold the property owned by PENNIE A. DuBARRY (now PENNIE A. DeTORRES) liable by placing a Lien in the amount of $7,142.82, with interest at the rate of 2% per month until paid,” and listed the marital residence as the property subject to the lien. The problem, of course, is that the marital home was no longer “owned by PENNIE A. DUBARRY (now PENNIE A. De-TORRES),” the court having ordered otherwise.

On October 9, 2013, John filed a motion asking the court to release the lien, stating that he had attempted to refinance the [328]*328property pursuant to the property settlement agreement but could not do so because of the lien. John argued that the lien was improper because he had been “awarded the marital residence under the parties’ Marital Settlement Agreement.”

By order entered on October 23, 2013, the trial court granted John’s motion and set aside the lien. In doing so, the court found as follows:

Counsel for [John] argues that neither she nor her client had notice of the existence of the aforementioned [employment] contract at the time the [Property Settlement] Agreement was negotiated. Moreover, neither was presented with notice of the lien. The lien was filed after entry of an agreement in which both parties agreed the home would be the property of [John]. After entry of the Agreement, [Pennie] no longer had any interest in the home, but rather had interest only in the money which was to be paid to her representing her share of the equity of the home.
The Court finds that Respondent had no notice of the contract which Mr. Stone asserts established the basis for the lien he ultimately filed. Said contract for fee was entered prior to [John] engaging in good faith negotiations regarding the home which is the asset upon which the lien attached. [John] was not provided with notice of said lien until he attempted to comply with the terms of the agreement to refinance. Additionally, according to the terms of the agreement, each party was responsible for their own attorney’s fees, with the exception of $1,500.00 paid by [John], As a result of the lack of notice to [John] of the contract between Mr. Stone and [Pennie], the Court concludes that the lien is improper and shall be set aside to permit [John] to comply with the terms of the agreement which he negotiated in good faith.

Stone timely filed a motion to alter, amend, or vacate, which the court denied on November 12, 2013. Stone then appealed to the Court of Appeals.

The majority of the Court of Appeals panel affirmed the family court. In doing so, the Court stated as follows:

Stone contends that he was authorized to attach a lien to the property in order to secure the payment of his legal fees pursuant to the provisions of Kentucky Revised Statute[s] 376.460. He notes that the statute expressly permits an attorney to have a lien “upon all claims ... upon which suit has been instituted, for the amount of any fee agreed upon by the parties ....” The statute also provides that where an action “is prosecuted to a recovery of money or property, the attorney shall have a lien upon the judgment recovered, legal costs excepted, for his fee.” But where the parties “in good faith and before judgment compromise or settle their controversy without the payment of money or other thing of value, the attorney for the plaintiff shall have no claim against the defendant for any part of his fee.” Rice v. Kelly, 226 Ky. 347, 10 S.W.2d 1112, 1115 (1928).
The parties in this case reached an agreement concerning the disposition of their property. Attorney Stone did not recover a judgment in the sense of creating an asset that could be attached as contemplated by the statute authorizing him to attach a lien to such assets. We conclude that under these circumstances, the provisions of KRS 376.460 have no application and that Stone was not entitled to file an attorney’s lien against the real estate.
Stone sought discretionary review, which this Court granted.

[329]*329II. Analysis

To put this ease in proper perspective, we first note that Stone has intermingled several lien concepts in an attempt to piece together a solution that works in his favor. In his brief to the Court of Appeals, and in his arguments here, he has argued both the right to a statutory attorney’s lien as well as concepts that derive from consensual or contractual liens. This is mixing apples and oranges.

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Cite This Page — Counsel Stack

Bluebook (online)
513 S.W.3d 325, 2016 WL 7655702, 2016 Ky. LEXIS 557, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stone-v-dubarry-ky-2016.