Falcone v. Hall

• Decision Date: 05 July 1956
• Docket Number: No. 13028.,13028.
• Citation: 98 US App. DC 363,235 F.2d 860
• Parties: A. V. FALCONE and R. K. Millstein, Appellants, v. Josef Washington HALL et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

98 US App. DC 363, 235 F.2d 860 (1956)

A. V. FALCONE and R. K. Millstein, Appellants, v. Josef Washington HALL et al., Appellees.

No. 13028.

United States Court of Appeals District of Columbia Circuit.

Argued May 10, 1956.

Decided July 5, 1956.

Messrs. Edward S. Duvall and R. K. Millstein, Washington, D. C., submitted on the brief for appellants.

Mr. John B. Cullen, Washington, D. C., entered an appearance for appellees Josef Washington Hall and Thelma Taylor, for whom no brief was filed.

Mr. Jeremiah T. Riley, Washington, D. C., entered an appearance for appellee Margaret Fretter Hall, for whom no brief was filed.

Before PRETTYMAN, WILBUR K. MILLER, and FAHY, Circuit Judges.

PRETTYMAN, Circuit Judge.

This is an appeal by two attorneys, Falcone and Millstein, from orders of the District Court dismissing their complaint in the nature of a judgment creditor's bill.

In the complaint the two attorneys alleged they had been retained by Julia Hall on a contingent fee basis to enforce against Josef Hall certain claims arising out of a property settlement and a California decree of divorce. Pursuant to this agreement suit was filed in the United States District Court for the District of Columbia and judgment obtained in favor of Julia Hall for the sum of $3,075. Process issued on this judgment was returned nulla bona. Thereafter Julia Hall declined to initiate further proceedings to reach the alleged equitable interests of Josef Hall in certain real estate said to have been transferred without adequate compensation while suit was pending. Falcone and Millstein then filed their complaint in the nature of a judgment creditor's bill, joining as defendants, among others, their client, Julia Hall, and the judgment debtor, Josef Hall. The attorneys claimed that by virtue of their contingent fee agreement they were equitable assignees of a 40 per cent interest in the judgment entered by the District Court; they also claimed an attorney's lien on any money obtained on account of that judgment. The District Court dismissed the complaint on grounds that Falcone and Millstein were not proper parties to bring suit and that the provision of the District of Columbia Code relating to the assignment of judgments¹ had not been observed.

The complaint apparently stated several alternative theories, and we think it was not on its face fatally deficient. An attorney retained on a true contingent fee basis has "an interest in the cause of action."² This interest is treated for purposes of recognition as an equitable or contract lien, and an attorney entitled to such a lien is protected in a number of ways.³ We think that in a proper case an attorney may apply to the court in his own name, assert his interest and lien, and secure enforcement, to the extent necessary to satisfy a valid claim for compensation, of a judgment favorable to his client. If the attorney has an interest in the cause of action, he has an interest in the judgment into which the cause of action merges. If he has agreed to look only to the ultimate recovery for his compensation and has obtained a judgment establishing his client's right to recover, the client's subsequent failure or refusal to take steps to enforce collection of the judgment debt should not deprive the attorney of his fee; in these circumstances he should have the right to proceed in his own name to realize on the judgment upon which he has an equitable lien.

In such a proceeding the attorney must plead the contingent fee contract upon which he relies, making the client a defendant, as was done here, in order that the latter may have an opportunity to be heard as to whether the underlying contract was entered into and, if so, whether it was in...