Harvey J. Garod v. Steiner Law Office, PLLC & a.
Harvey J. Garod v. Steiner Law Office, PLLC & a.
Opinion
The plaintiff, Harvey J. Garod, appeals an order of the Superior Court ( O'Neill , J.) dismissing his conversion action against the defendants, R. James Steiner and Steiner Law Offices, PLLC. We reverse and remand.
I
Accepting the plaintiff's allegations as true, the pertinent facts are as follows.
SeeCoyle v. Battles
,
If I discharge my attorney or he withdraws from representation, I agree to *106 pay him at the rate of $350.00 per hour, $175.00 per hour for his legal assistant(s), quantum meruit, or thirty-three and one-third percent (33-1/3%) of the last settlement offer, whichever is greater, from any recovery obtained on my behalf. I do further agree that my attorney will be entitled to the full contingency fee identified in this contract if he substantially performs under the contract. I grant my attorney a lien for his fees and costs on any recovery I receive in my case.
The plaintiff worked for the client for two years before being discharged without cause. The client subsequently hired the defendants, who filed an action (underlying action) on behalf of the client. The defendants ultimately settled the underlying action on the client's behalf.
Prior to settlement, the plaintiff filed a motion to intervene in the underlying action, asserting that he possessed a contractual lien for fees and costs incurred during his representation of the client. The client objected to the motion, claiming, among other things, that: (1) intervention would be inappropriate because of the possibility of juror confusion and because the plaintiff retained the ability to bring a separate quantum meruit claim; and (2) the plaintiff had "neither a lien nor a contractual claim" and was limited to recovery in quantum meruit. The court denied the plaintiff's motion "for the reasons stated in the [client's] objection," without further elaboration. According to the defendants, the plaintiff subsequently filed a motion to vacate the court's order, which the court denied, ruling that it was "an untimely motion to reconsider."
After the settlement of the underlying action, the client filed a motion to order that the settlement check be made "payable solely to [the client] and her counsel, R. James Steiner." The court granted the motion.
On the same day, the plaintiff filed a series of motions in the underlying action, including a second motion to intervene wherein he again asserted that he possessed a contractual lien, a motion for interpleader, and a motion to foreclose lien. The client objected to all these motions, and the court denied all of them without explanation.
The plaintiff then initiated this action against the defendants, again alleging that he had an enforceable contractual lien for fees against the defendants. The defendants moved to dismiss the action for failure to state a claim. In its order granting the motion, the court noted that the plaintiff's contractual lien claim was "arguably barred by the doctrine of collateral estoppel." Nonetheless, the court found that the plaintiff's claim failed on the merits because he had not submitted any evidence of his contract with the client, and, thus, failed to allege "facts that c[ould] be reasonably construed to meet the elements of an enforceable contract containing the lien term."
The plaintiff moved for reconsideration and for leave to file an amended complaint, along with the proposed amended complaint. The defendants objected to these motions, and moved to dismiss the amended complaint. The court denied the motion for reconsideration and scheduled a hearing on the other motions. After the hearing, the court granted the plaintiff's motion to file the amended complaint and granted the defendants' motion to dismiss the amended complaint, noting that the plaintiff's cause of action "remains barred by the doctrine of collateral estoppel." The court then quoted its earlier order dismissing the plaintiff's original complaint, stating:
*107 [I]t is plain from the record that [the plaintiff repeatedly asserted that he had a lien when he sought to intervene in the client's underlying action]. It is also clear that at least two separate Justices issued orders rejecting the plaintiff's assertion that he had a lien, thus deciding this issue on the merits. Further, while the plaintiff was not a formal party in the underlying action, the fact that he first raised the issue of the lien in a Motion to Intervene and the court's determination of this issue was the precise basis for denying said Motion suggests that the third condition of collateral estoppel is also met.
(Quotation and citations omitted.) The court also ruled that the plaintiff's amended complaint failed to state a claim because it found, among other things, that our decision in
Adkin Plumbing v. Harwell
,
II
On appeal, the plaintiff argues that the trial court erred in: (1) finding that his claim is barred by collateral estoppel; (2) invalidating the contractual lien and determining that it is not binding upon the defendants; (3) concluding that quantum meruit was his only method of recovery; and (4) determining that the underlying action filed by the defendants on behalf of the client "extinguished his property rights to the lien AND the secured fees and costs." He also appears to claim that the trial court's various decisions violated his due process rights.
We review motions to dismiss to determine whether the plaintiff's allegations are reasonably susceptible of a construction that would permit recovery.
Coyle
,
A
The plaintiff asserts that his claim is not barred by collateral estoppel because there was no "appearance, hearing, and litigated decision on the merits" relating to his lien claim in the underlying action. The defendants claim that the trial court's rulings denying the motions to intervene should be given preclusive effect so as to bar the present action.
The doctrine of collateral estoppel "bars a party to a prior action, or a person in privity with such party, from relitigating any issue or fact actually litigated and determined in the prior action."
412 S. Broadway Realty v. Wolters
,
We focus our analysis on whether the attorneys' lien issue was essential to the trial court's decisions. In a comment explaining the final requirement for collateral estoppel, the
Restatement (Second) of Judgments
states that if "issues are determined but the judgment is not dependent upon the determinations, relitigation of
*108
those issues in a subsequent action between the parties is not precluded."
Restatement (Second) of Judgments
§ 27, cmt.
h
at 258 (1982). In this case, we must evaluate whether the lien issue was essential when the trial court denied the plaintiff's motion to intervene for multiple reasons without stating which one of those reasons was dispositive.
SeeTyler v. Hannaford Bros.
,
In this case, the trial court made no specific findings of fact, but we must assume that the court made all findings of fact necessary to support its decisions.
SeeIn the Matter of Salesky & Salesky
,
B
The plaintiff next argues that, given that both "liens and unsecured identifiable funds are subject to conversion," the trial court erred in dismissing his conversion claim regarding his alleged contractual lien against the defendants. "Conversion is an intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel."
Kingston 1686 House, Inc. v. B.S.P. Transportation, Inc.
,
The plaintiff asserts that he may recover from the defendants on the basis of the contractual lien granted to him by the client. The plaintiff argues that, because New Hampshire law permits contractual liens, and because the client executed the engagement agreement that included a contractual lien, he is entitled to the full contingency fee and costs secured by that lien. The defendants argue, and the plaintiff does not dispute, that the statutory lien created under RSA 311:13 (2015) is unavailable to the plaintiff inasmuch as it attaches "no earlier than the date of entry of the appearance of counsel" in the "proceeding" to which it relates.
Peterson v. Reilly
,
The defendants dispute the plaintiff's right to a contractual lien on the grounds that our case law restricts him "to a claim against the client in quantum meruit." There is no doubt that we have held that an attorney discharged without fault may not recover pursuant to his contingent fee contract with the client, but is instead limited to a recovery in quantum meruit for the reasonable value of the services rendered prior to being discharged.
Adkin
,
C
Having thus established that the plaintiff may have a valid lien for the reasonable value of his services, we next consider whether that lien is enforceable against the defendants. The plaintiff asserts that the contract signed by the client is enforceable against the defendants because the defendants were aware of the lien at the time they were retained, and because the client should not be required to pay both lawyers' fees. The defendants' position is that, if the plaintiff has any claim for fees, the claim lies only against the client. Under the particular circumstances of this case, we are persuaded by the plaintiff's argument.
Because the defendants do not argue that they were unaware that the client had discharged a prior attorney before retaining their services, we conclude that the lien for fees claimed by the plaintiff
may
be enforceable against the defendants. In so holding, we follow the view espoused by the Indiana Supreme Court in
Galanis v. Lyons & Truitt
,
In a system of professional responsibility that stresses clients' rights, it is incumbent upon the lawyer who enters a contingent fee contract with knowledge of a previous lawyer's work to explain fully any obligation of the client to pay a previous lawyer and explicitly contract away liability for those fees. If this is not done the successor assumes the obligation to pay the first lawyer's fee out of his or her contingent fee. [The successor lawyer] was in the best position to evaluate and to reach an agreement as to a reasonable fee for the value of the work *110 already done in [the client's] case. "Lawyers almost always possess the more sophisticated understanding of fee arrangements. It is therefore appropriate to place the balance of the burden of fair dealing and the allotment of risk in the hands of the lawyer in regard to fee arrangements with clients." In the Matter of Myers ,663 N.E.2d 771 , 774-75 (Ind. 1996). [The successor lawyer] also had the option to discuss with [the client] the need for someone to pay [the prior lawyer's] fee and to refuse to accept the case if [the client] could not resolve any open issues with [the prior lawyer]. [The successor lawyer] neither advised [the client] of the need to pay the fee nor contracted away that responsibility for himself. Under these circumstances, [the successor lawyer], not [the client], should bear the burden of his silence. Accordingly, [the prior lawyer] is entitled to recover the compensation due [him] from [the successor lawyer's] contingent fee.
Galanis
,
We find the
Galanis
court's reasoning persuasive, and, therefore, hold that the trial court erred in dismissing the plaintiff's amended complaint. Accordingly, we reverse the trial court's judgment and remand for further proceedings consistent with this opinion. In so doing, we emphasize that, for purposes of this appeal, we have accepted the plaintiff's allegations as true.
SeeCoyle
,
Reversed and remanded .
DALIANIS, C.J., and HICKS, CONBOY, and BASSETT, JJ., concurred.
Reference
- Full Case Name
- Harvey J. GAROD v. STEINER LAW OFFICE, PLLC & A.
- Cited By
- 1 case
- Status
- Published