HomeMy WebLinkAbout96-4020 civilELIZABETH a. LITTLE IN THE COURT Of COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
V. NO. 96-4020 CIVIL
WILLIAM J. LITTLE
IN RE: OPINION PURSUANT TO Pa.R.A.P. 1925
HOFFER, J:
In this divorce action, Elizabeth Little is the plaintiff and William Little is the
defendant. The appeal is on behalf of plaintiff's former attorney, Theresa Barrett
Male, Esquire, who claims a "retaining lien" on certain marital proceeds for her fee.
Some background is necessary. Plaintiff and defendant had several
protracted hearings in front of the Divorce Master over their assets. The Master's
final report was filed February 25, 1999, making division of the property.
Neither party filed exceptions to the report. Attorneys for both sides then
participated in the drafting of a Decree in Divorce and a Distribution Order
consistent with the Master's recommendations. The Court received these
documents in the beginning of Apdl.
Several days later, the Court received a pro se letter from Elizabeth Little
claiming dissatisfaction with the jointly prepared order.
The Court thereafter held an office conference with both attorneys to
determine how best to proceed. It was the Court's determination that Mrs. Little be
given the opportunity to appear in the open courtroom to explain her position on the
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distribution order, which position was in opposition to that of her attorney, Mrs.
Male.
In response to the Court's suggestion, counsel for Mr. Little prepared a Rule
to Show Cause (on a Motion for Entry of Divorce Decree and Distribution Order)
and a hearing was set for May 24, 1999.
On the other side, Attorney Male filed two Rules to Show Cause; one for
Leave to Withdraw as Counsel, and the second asserting a "Retaining Lien" on
settlement proceeds for her fee. Hearing on these motions was also set for May
24.
On May 24, both attorneys appeared, as did Mrs. Little. No swom testimony
was taken, but a record was made.
The Court reviewed Mr. Little's Rule for a Decree and Distribution with Mrs.
Little, and determined that she had no defense to it. Both decrees were signed.
Mrs. Little had no objection to the withdrawal of Attorney Male as her
counsel, and that withdrawal was granted.
Attorney Male then attempted to proceed to prove her case on the question
of counsel fees. Since Mrs. Little was a pro se litigant at that point, the Court
refused to take sworn testimony. However, since Mrs. Little agreed that she owed
$5,000.00 to Attorney Male, the Court did grant the request to that extent.
Attorney Male's appeal is over the refusal of the Court to charge Mrs. Little
with an additional $8,000+ requested. Although appellant's Statement of Matters
Complained Of raises three questions, they basically are variations of a theme; i.e.,
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the Court would not take testimony on the value of the attorney's services or the
reasonableness of the fee.
Discussion
Attorney Male claims that this Court abused its discretion when it refused to
take testimony, at the May 24, 1999, headng, on the value and reasonableness of
the fee she claimed was owed by Mrs. Little. Attorney Male asserts that she has a
"retaining lien" on a marital settlement fund held by Mr. Little's attorney, Constance
P. Brunt, which will cover the fees owed. At the hearing, the Court entered an
order awarding Attorney Male $5,000 for fees after Mrs. Little admitted owing that
amount. Attorney Male has filed an appeal based on her contention that Mrs. Little
still owes more than $8,000.
The black letter law on attorney's fees reflects the following principles: an
attorney is owed reasonable compensation for legal services rendered to a client.
P.L.E.2d, Ch.5 § 71. An attorney generally may retain funds held by him which
belong to the client to satisfy a fee. P.L.E.2d, Ch. 5 § 82. Where a fund is brought
into court through the efforts of an attorney, the Court may award him reasonable
compensation out of the fund. P.L.E. 2d, Ch. 5 § 83. The remedy for enforcement
of an attorney's claim for fees arising out of a contract is an action at law. P.L.E.2d
Ch. 5 § 84. The attorney has the burden to prove the reasonableness of the fee
and the client has the burden of proving matters of affirmative defense. P.L.E.2d,
Ch. 5 § 86.
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In the case at bar, the Court refused to take testimony on Attorney Male's
fee. Although Attorney Male may have been prepared to present her claim, Mrs.
Little was not given ample opportunity to prepare. Mrs. Little arrived at the May 24,
1999 hearing represented by Attorney Male. One of the first orders of business
taken care of at the hearing was to allow Attorney Male to withdraw as counsel for
Mrs. Little. This Court believed it to be fundamentally unfair to subject Mrs. Little,
now a pro-se litigant, to a proceeding on a fee without Attorney Male filing an action
at law to recover her fee. The Court ordered Mrs. Little to pay Attomey Male
$5,000 because it was the amount Mrs. Little admitted owing. Any additional
disputed fee can be settled by an action at law filed by Attorney Male against Mrs.
Little. In such an action, Mrs. Little could be represented and able to present
testimony of her own, possibly provided by an expert, to dispute Attorney Male's
claims.
More to the point, however, Attorney Male has misconstrued the use of a
retaining or charging lien. Such a lien may be used to insure the payment of
attorney's fees. P.L.E.2d, Ch. 5 § 101. However, limitations on retaining liens do
exist. A lien may attach to funds, belonging to the client, held by the attorney or to
a fund or judgment recovered or created by an attorney's efforts. P.L.E.2d, Ch. 5
§102. "Such a lien cannot be recognized unless it appears that the attorney's
services contributed pdmadly to the creation of the fund." Comment to P.L.E.2d,
Ch. 5 § 102.
The cdteria allowing a court to recognize a charging lien are:
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1. A fund exists which can be distributed on equitable principles.
2. The services of the attorney operated to create or secure the fund out of
which he seeks to be paid.
3. Attorney and client agreed that the attorney look to the fund rather than
the client for payment.
4. The lien claimed is for fees, costs or other disbursements incurred in the
litigation which created the fund.
5. Equitable considerations require recognition and application of the
charging lien.
Recht v. Urban Redevelopment Authority, 402 Pa. 499, 168 A.2d 134 (1961).
Attorney Male has cited to Shaw by Ingrain v. Bradley, 448 Pa. Super. 506,
672 A.2d 331 (1996) and Romano by Romanov. Lubin, 365 Pa. Super. 627, 530
A.2d 487 (1987) for support that failure to apply the lien law appropriately results in
abuse of discretion. Both cases involved contingent fee claims from a tort award to
a minor plaintiff where the court reduced the fee based upon powers granted in
Pa.R.Civ. P. 2039. In Romano, the fee reduction was found to be an abuse of
discretion. Romano at 631, 530 A.2d at 489. However, in Shaw, no abuse of
discretion was found. Shaw at 510, 672 A.2d at 333.
Independent research on charging lien law has led the court to the case of In
re Purman's Estate, 358 Pa. 187, 56 A.2d 86 (1948). In Purman's Estate,
attorneys claimed charging liens on distdbutees' shares of an estate. Id.
A charging lien of an attorney (where he does not have
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possession) upon a fund in court is based upon the
equitable principle that the attomey primarily aided
in producing the fund and to which, by agreement with
his client, he is to look for compensation. In the
instant case the attomeys procured no fund for their
client. [emphasis added.]. True, they represented
her interest and cooperated with the fiduciary in collecting
assets and resisting improper claims against the estate...
There is no basis for decreeing a charging lien against
this distributive share.
In re Purman's Estate, 358 Pa. 187, 191, 56 A.2d 86, 88 (1948).
Applying charging lien law and the Recht criteria, this Court found that
Attorney Male was not entitled to a lien for fees against the fund held by Attorney
Brunt. Although a fund exists and the lien claimed is for fees, costs and other
disbursements related to Mrs. Little's divorce, the other three criteria do not apply in
such a way to compel the ward of a charging lien.
Attorney Male and Mrs. Little had a wdtten fee agreement which said the
attomey may ask the client to execute a judgment or lien upon property or
proceeds of equitable distribution and could retain funds received on behalf of the
client to satisfy fees due. There was no express agreement that the attomey would
look to a fund held by someone other than the attomey, for compensation before
looking toward the client.
Equitable considerations do not require the application of a charging lien.
Attomey Male's fee is in dispute. Mrs. Little was unrepresented at the time
Attomey Male wanted to present evidence in support of her claim. The best
possible solution for such a fee dispute is an action at law.
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Most importantly, Attorney Male's actions did not create or secure the fund
out of which she seeks to be paid. The fund is a result of equitable distribution in a
divorce. The monies were Mrs. Little's before litigation commenced. Attorney
Male, as the attorneys in Purman's Estate did, protected Mrs. Little's shares of the
marital assets. Attorney Male did not procure the fund.
Under the circumstances in the case at bar, a charging lien was not awarded
to Attorney Male. The Court properly ordered (1) a $5,000 payment to Attorney
Male for fees Mrs. Little agreed were due; and (2) disbursement of the remaining
balance. Attorney Male is now left to proceed, as ordinary persons would, with an
action at law for any fees she believes are still due.
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