Boline v. Doty, C1-83-1138

• Citation: 345 N.W.2d 285
• Decision Date: 14 March 1984
• Docket Number: No. C1-83-1138,C1-83-1138
• Parties: Richard M. BOLINE and DaVonna A. Boline, Appellants, v. Russell L. DOTY, Respondent.
• Court: Minnesota Court of Appeals

Page 285

345 N.W.2d 285

Richard M. BOLINE and DaVonna A. Boline, Appellants, v. Russell L. DOTY, Respondent.

No. C1-83-1138.

Court of Appeals of Minnesota.

March 14, 1984.

Syllabus by the Court

1. The amount of an attorney's lien must be fairly litigated. It may be determined either summarily in the proceeding establishing the lien or in the separate equitable action enforcing the lien.

2. An equitable action must be brought to enforce an attorney's lien.

Dennis L. Peterson, Lauren K. Maker, Minneapolis, for appellants.

Douglas Peine, Joseph M. Buchmeier, St. Paul, for respondent.

Heard, considered and decided by PARKER, P.J., and WOZNIAK and LANSING, JJ.

OPINION

LANSING, Judge.

The issue presented in this case is whether the trial court properly applied the attorney lien statute, Minn.Stat. § 481.13 (1982). The trial court followed summary judgment procedures in establishing a lien and did not require the attorney enforcing the lien to bring an equitable action. The trial court also ordered a lien on property not involved in the cause of action even though the respondent had not executed, in advance, any security agreements on the property. We reverse.

FACTS

On March 19, 1981, the appellants and the respondent signed a retainer agreement. The respondent agreed to represent the appellants in litigation involving the Convenient Food Mart in Minneapolis. The appellants agreed to pay respondent a fee of $70-$80 per hour. The agreement also provided that attorney fees were made a lien upon any judgment or settlement arising out of the matter. In addition, the agreement required the appellants to:

execute in advance security or other collateral agreements as necessary to secure the attorney fees to be expended on this case. Such agreements may include, but not be limited to, ownership rights in a 1978 Dodge, rights to clients' proceeds form [sic] a sale of a nursery owned in part by clients with her parents and others, and a right to a mortgage on clients' homestead with payments to accrue at not less than $200 per month while the debt is outstanding.

The respondent's efforts on behalf of the appellants were extensive. He was successful in winning for the appellants 100 percent ownership rights to the store, cancelling a five percent franchise fee, gaining ownership of two underground gas tanks, obtaining rights to proceeds under a gasoline sales contract, and defending appellants in an unlawful detainer action.

In the fall of 1982, all litigation involving the store was completed. In attempting to collect his fee, the respondent invoked the attorney lien statute, Minn.Stat. § 481.13. On July 4, 1983, respondent served the appellants with an order to show cause and notice of claim of attorney's lien, setting the matter for July 18, 1983. The trial court, on July 20, 1983, established an attorney's lien for $65,994.67 to attach to certain specified property. The court then ordered an evidentiary hearing to decide which method of enforcement should be used and what property should be excluded from the lien under Minn.Stat. § 481.13. The court also ordered the respondent to release all files and papers he acquired or prepared in representing the appellants.

The "evidentiary" hearing was held on August 11, 1983, before a different district court judge. The hearing was conducted "in a summary manner," according to the trial court. The judge, saying that the $65,994.67 has become "the law of the case for good or ill", did not allow inquiry into the amount of the lien. No testimony was taken on any issue. At the conclusion of arguments by counsel, the trial court made several findings on the record, some of them "decreed summarily." These findings were included in the trial court's judgment on August 16, 1983. Among other things, the trial court found that the respondent was entitled to a lien of $65,994.67, as previously determined in the July 20, 1983, order. The court found that the retainer agreement provided that respondent could have a lien on the appellants' interest in Denny's Nursery and Garden Center, Inc., in Willmar, Minnesota. The trial court ordered that the appellants' stock in the Crosstown Market (formerly known as the Convenient Food Mart) be sold by the sheriff to satisfy the lien which had attached to the common stock and assets of the store. The court further ordered that appellants' interest in Denny's Nursery was to be sold if the proceeds of the sale were insufficient, and that the sales were to be in accordance with Minn.Stats. § 550.18 to § 550.21 (1982).

ISSUE

Did the trial court properly apply the requirements of Minn.Stat. § 481.13 in establishing and enforcing the respondent's attorney's lien?

ANALYSIS

At common law, two types of attorney's liens were recognized--the possessory or retaining lien, and the charging lien. Akers v. Akers, 233 Minn. 133, 46 N.W.2d 87 (1951). The Minnesota legislature has long since preempted this field and has substituted statutory procedures. Village of New Brighton v. Jamison, 278 N.W.2d 321 (Minn.1979).

Prior to 1976, Minnesota law provided for a possessory or retaining lien. This lien gave the attorney the right to retain a client's papers or money until the client paid the attorney's bill. Id. at 324. The retaining lien was abolished in 1976. Laws of Minnesota 1976, Chapter 304, Section 2.

The charging lien still remains. The theory behind this lien is that a successful party should not be permitted the fruits of the judgment secured by the attorney's services without paying for those services. Schroeder, Siegfried, Ryan and Vidas v. Modern Electronic Products, Inc., 295 N.W.2d 514 (Minn.1980); Note, Attorney v. Client, Lien Rights and Remedies in Tennessee, 7 Memphis St.L.Rev. 435, 446 (1977). Minn.Stat. § 481.13 provides for charging liens. This statute protects attorneys whose clients have agreed to pay fees by imposing a lien; it does not create an agreement to pay attorney fees. Johnson v. Blue Cross and Blue Shield of Minnesota, 329 N.W.2d 49, 53 (Minn.1983). A lien is a hold or claim on the property as security for a debt or charge. In re Estate of Eggert, 245 Minn. 401, 72 N.W.2d 360 (1955). It is a property right. Sager v. Burgess, 350 F.Supp. 1310, 1312 (E.D.Pa.) aff'd 411 U.S. 941, 93 S.Ct. 1923, 36 L.Ed.2d 406 (1972). The charging lien is on the cause of action and on the client's interest "in any money or property involved in or affected by any action or proceeding in which he may have been employed," and on the judgment. Minn.Stat. § 481.13, subd. 1, 2.

The procedural requirements for an attorney's lien are found in Minn.Stat. § 481.13, subd. 3. This section reads:

The liens provided by clauses (1) and (2) may be established, and the amount thereof determined, by the court, summarily, in the action or proceeding, on the application of the lien claimant or of any person or party interested in the property subject to such lien, on such notice to all parties interested therein as the court may, by order to show cause, prescribe, or such liens may be enforced, and the amount thereof determined, by the court, in an action for equitable relief brought for that purpose.

Judgment shall be entered under the direction of the court, adjudging the amount due.

We are faced with the question of construing this section of the statute, using as guidance case law which has never addressed the precise issues here. This statute differentiates between establishing the lien, determining its amount and enforcing the lien. It should be noted that prior to establishing the lien a notice of attorney's lien must be filed in accordance with the requirements of Minn.Stat. § 481.13, subd. 4. See Schroeder, 295 N.W.2d at 515.

The statute provides that a lien may be established "summarily" in the action or proceeding. Alternatively, the lien may be established in the separate equitable enforcement action. See Id. We observe that the Minnesota Supreme Court has essentially interpreted the word "summarily" to mean "summary proceeding." Village of New Brighton, 278 N.W.2d at 325; Westerlund v. Peterson, 157 Minn. 379, 382, 197 N.W. 110, 111 (1923).

A summary proceeding is "[a]ny proceeding by which a controversy is settled * * * in a prompt * * * manner, without the aid of a jury * * *." Black's Law Dictionary 1084 (rev. 5th ed. 1979). In Minnesota, not all summary proceedings preclude jury trials; however, summary proceedings characteristically are immediate and abridge formal procedures. Summary proceedings are used in numerous instances, such as unlawful detainer actions, University Community Properties, Inc. v. Norton, 311 Minn. 18, 246 N.W.2d 858 (1976); ballot preparation contests, In re Daly, 294 Minn. 351, 200 N.W.2d 913, cert. den. 409 U.S. 1041, 93 S.Ct. 528, 34 L.Ed.2d 491 (1972); and actions to compel sheriffs to pay money collected, E.J. Brach & Sons v. Fitzgerald, 155 Minn. 369, 193 N.W. 585 (1923).

The amount of the lien may be determined either at the time it is established or at the time it is enforced....