Redevelopment Land Agency v. Dowdey

• Decision Date: 30 December 1992
• Docket Number: 90-CV-514.,No. 90-CV-361,90-CV-361
• Citation: 618 A.2d 153
• Parties: DISTRICT OF COLUMBIA REDEVELOPMENT LAND AGENCY, Appellant/Cross-Appellee, v. Landon G. DOWDEY, Appellee/Cross-Appellant.
• Court: D.C. Court of Appeals

618 A.2d 153

DISTRICT OF COLUMBIA REDEVELOPMENT LAND AGENCY, Appellant/Cross-Appellee, v. Landon G. DOWDEY, Appellee/Cross-Appellant.

Nos. 90-CV-361, 90-CV-514.

District of Columbia Court of Appeals.

Argued December 17, 1990.

Decided December 30, 1992.

Robert Vieth, with whom Stephen Colangelo was on the brief, for appellant/cross-appellee, District of Columbia Redevelopment Land Agency.

Marya C. Young, for appellee/cross-appellant, Landon G. Dowdey.

Before TERRY, STEADMAN, and WAGNER, Associate Judges.

WAGNER, Associate Judge:

The District of Columbia Redevelopment Land Agency (RLA) appeals from a judgment of the trial court holding that RLA deprived appellee, Landon G. Dowdey (Dowdey), of just compensation for his attorney's lien on real property which RLA acquired on behalf of the government by eminent domain, and awarding Dowdey a judgment for $56,601.16 with interest at the rate of six percent per annum from March 29, 1973. Appellee cross-appeals from the denial of his requests for interest at prevailing market rates and attorney's fees.

On appeal, RLA contends that the trial court erred in entering judgment for appellee because: (1) the District of Columbia does not recognize attorney's liens, and the lien, if any, did not attach before RLA took the property; and (2) res judicata and collateral estoppel principles bar appellee's claim against RLA. In his cross-appeal, appellee contends that the trial court erred in applying the statutory interest rate instead of the rates which would provide just and reasonable compensation for his interest. We hold that: (1) appellee acquired an attorney's lien by contract prior to condemnation of his client's property which transferred to the funds deposited by RLA into the registry of the court at the commencement of the condemnation proceeding; (2) although on notice of appellee's claim, RLA failed to join him in the proceeding as required by statute as a result of which appellee was not compensated for his property; (3) appellee/cross-appellant is not entitled to attorney's fees; and (4) appellee/cross-appellant is entitled to a determination of the amount of interest which will compensate him for the property taken. Therefore, we affirm the judgment of the trial court, except for its ruling on the amount of interest awarded and remand for consideration of the question consistent with this opinion.

I.

The events out of which the present controversy arises commenced in early 1972. William C. and Sofrona Baylies (the Baylies) retained Dowdey to resist foreclosure on their real property located at 1711-14th Street, N.W. in the District of Columbia until the anticipated condemnation of the property by RLA. It is undisputed that the Baylies and Dowdey made an oral agreement for attorney's fees under the terms of which the Baylies were to pay appellee one-third of the equity in the 14th Street property which Dowdey either preserved or recovered on their behalf.¹ On April 24, 1972, Dowdey filed an action in the Superior Court of the District of Columbia on behalf of the Baylies to prevent foreclosure on the property.² Dowdey's efforts were successful in that foreclosure was delayed until RLA filed suit for condemnation of the property in the United States District Court for the District of Columbia.³ In accordance with the condemnation statute, RLA deposited into the court registry $290,000 "to the use of the persons entitled" for 1711-14th Street, N.W., representing the estimated fair compensation.⁴

The same day that RLA filed suit, Dowdey filed an action in the United States District Court for the District of Columbia against the Baylies seeking a declaration and enforcement of an attorney's lien against the Baylies' equity in the property.⁵ Although RLA knew of Dowdey's claim in the property, it never joined him as a party in the condemnation proceeding.⁶ On March 29, 1973, the District Court ordered release of the $290,000 deposited by RLA to Shenandoah Land Title Company (Shenandoah), purportedly the authorized agent for Title Insurance Company of Minnesota (Minnesota Title). The order required Shenandoah to distribute the proceeds for payment and discharge of "all taxes, assessments, liens and encumbrances against the property on the date of taking" and the redemption of any tax sales thereof, with the balance to be paid over to the parties entitled to it. Dowdey did not receive any money for his claim.

Two years later, on April 4, 1975, the district court entered judgment for Dowdey against the Baylies in the amount of $56,601.16, representing the amount of Dowdey's "attorney's lien against the sum deposited in the Registry of the Court in lieu of property condemned ..."⁷ The district court (J. Gasch) made the following finding of fact in that action which is pertinent to the arguments on appeal:

Dowdey is entitled to an attorney's lien against defendant's equity in premises 1711-14th Street, N.W., in the amount of Fifty-six Thousand and Six Hundred One Dollars and sixteen cents ($56,601.16).

The court also found that the funds deposited by RLA for the property were disbursed without payment to Dowdey, although the defendants had actual notice of Dowdey's claim.⁸ The Baylies never paid the judgment, and Dowdey filed other actions in an effort to collect the fee.

On August 3, 1976, Dowdey sued RLA's title insurance company, Minnesota Title, in the United States District Court for the District of Columbia, alleging that Minnesota Title wrongfully disbursed the proceeds of the condemnation funds without paying Dowdey even though it was on notice of Dowdey's suit to declare and enforce an attorney's lien.⁹ Following a trial by the court, the district court entered judgment for Minnesota Title in 1980, finding that Dowdey failed to establish that Minnesota Title authorized Shenandoah to disburse the condemnation proceeds from the 14th Street property and that Shenandoah had acted on behalf of the Baylies, rather than Minnesota Title, in making the disbursement. Pertinent to arguments raised on appeal by RLA, the district court in its Memorandum Opinion (J. Parker) also rendered the following interpretation of Judge Gasch's order in Dowdey v. Baylies:

Judge Gasch did not view Dowdey's claim as a charge or encumbrance against the 14th Street property. Rather, he found that a lien attached to the Baylieses' sic share of the proceeds in accordance with the parties' agreement and therefore rendered a money judgment against Baylies and his wife.

Dowdey appealed from the judgment in the Minnesota Title litigation. The United States Court of Appeals for the District of Columbia Circuit affirmed the trial court's decision,¹⁰ stating in its unpublished order:

Substantially for reasons stated by the District Court, we agree with the result reached in this case. In particular, we find no solid ground for disturbing the District Court's conclusion that (1) appellant Dowdey's lien attached to the Baylies' share of the condemnation proceeds rather than to the property that was the subject of the condemnation proceedings,...

Thus, Dowdey was unable to recover the amount of his lien from Minnesota Title.¹¹

On March 27, 1987, Dowdey filed the complaint in Superior Court against RLA out of which the present appeal arises. The case was tried by the court on stipulated facts. The trial court determined that Dowdey had an equitable lien on the property which was perfected before RLA's condemnation action and that RLA deprived appellee of his property without just compensation by failing to join him in the condemnation proceeding pursuant to Fed.R.Civ.P. 71A(c)(2). The trial judge accepted as the law of the case the ruling of the motions judge on RLA's motion to dismiss and Dowdey's motion for summary judgment, which determined the following:

1) defendant had been under a legal duty to join plaintiff in the condemnation;

2) plaintiff had an equitable lien on the equity of the real property at issue here under District of Columbia law and accordingly plaintiff had a right of recourse against the defendant regardless of his possible recourse against the title company;

3) plaintiff's claim was timely filed because the applicable statute of limitations is fifteen years and;¹²

4) defendant could adduce at trial all evidence to support his claimed equitable defenses.

The trial court determined that appellee had a lien on the property which transferred to the fund when deposited into the court registry by RLA. Noting that Baylies' equity was cut off as soon as the funds were deposited, the trial court concluded that neither the decision in Dowdey v. Baylies nor that in the Minnesota Title litigation precluded a suit against RLA for wrongfully cutting off Dowdey's perfected equitable lien on the 14th Street property. Since appellee claimed an interest in the property, the trial court determined that Dowdey should have been joined in the condemnation proceedings pursuant to Fed. R.Civ.P. 71A(c)(2).

II.

Appellant RLA argues that Dowdey cannot prevail on his claim against RLA for compensation because there was no attorney's lien on the property at the time RLA acquired it. The principal reasons advanced by RLA for its position are that: (1) under the law of the District of Columbia, an attorney's lien does not attach to the client's real property for fees for services rendered by the attorney to secure title or protect the client's property; and (2) Dowdey had no interest in the land at the time RLA acquired title. Dowdey contends he did not claim that he acquired a lien on the real property by reason of the mere performance of legal services. Rather, Dowdey argues that his lien for a contingent fee was created by an express agreement with his clients and that such a lien is cognizable under local law. Dowdey contends that the filing of his lawsuit against his former clients to enforce the lien after the condemnation proceeding does not defeat the attachment of the lien upon the...