Craig v. Jo B. Gardner, Inc.

• Citation: 586 S.W.2d 316
• Decision Date: 11 September 1979
• Docket Number: No. 60803,60803
• Court: Missouri Supreme Court
• Parties: William E. CRAIG, Burlington Northern, Inc., United States Railroad Retirement Board and James Cowen, Neil Speirs and Wyeth Quarles, Members of United States Railroad Retirement Board, Respondents, v. JO B. GARDNER, INC., J. Arnot Hill and Sloan R. Wilson, Individuals d/b/a Hill& Wilson, Appellants.

Page 316

586 S.W.2d 316

William E. CRAIG, Burlington Northern, Inc., United States

Railroad Retirement Board and James Cowen, Neil

Speirs and Wyeth Quarles, Members of

United States Railroad

Retirement Board, Respondents, v. JO B. GARDNER, INC., J. Arnot Hill and Sloan R. Wilson, Individuals d/b/a Hill& Wilson, Appellants.

No. 60803.

Supreme Court of Missouri, En Banc.

Sept. 11, 1979.

Jo B. Gardner, Monett, for appellants.

E. Eugene Harrison, Ronald S. Reed, Jr., Vernon A. Poschel, Kansas City, Dale G. Zimmerman, Gen. Counsel, Railroad Retirement Bd., Chicago, Ill., Philip C. Ehli, Kansas City, for respondents.

SEILER, Judge.

This case is a consolidation of separate appeals by two law firms, Jo B. Gardner, Inc., and J. Arnot Hill and his associate, Sloan R. Wilson, from a judgment in interpleader in the Jackson County circuit court. The main dispute is over a fee. Appeal was originally taken to the western district of the court of appeals, but the cause was transferred to this court prior to opinion because within our exclusive appellate jurisdiction under Mo.Const. art. V, § 3 (1945), since the constitutional validity of a portion of the Railroad Unemployment Insurance Act, 45 U.S.C. § 362(O ) (1976) is at issue. Gardner asks us to determine whether the circuit court correctly awarded to Hill attorney fees of 25 percent of a recovery by Craig, plaintiff in the main action (a federal employers liability action, known as an FELA claim) and a defendant in interpleader, from his employer, Burlington Northern, Inc., and 40 percent to Gardner, with Hill's 25 percent taken from Gardner's percentage due to the latter's promise to pay any fees owing to "other attorneys" by Craig. Secondly, we are asked to decide whether the United States Railroad Retirement Board can constitutionally claim a right to recovery under 45 U.S.C. § 362(O ) of all sums paid by it to Craig from the amount collected by him in his judgment against Burlington Northern ¹ and, if so, can the Board do so without payment of a portion of Gardner's attorney's fees. Finally, Hill argues in his cross appeal that the court erred in failing to award him his proportionate share of the income produced on the interpleader fund, in addition to his attorney fees.

The facts are somewhat involved. Briefly, Craig was allegedly injured twice during the course of his employment as a switchman for Burlington Northern, Inc., a railroad, at its hump yard in North Kansas City. The first accident allegedly occurred on September 5, 1971, the second on September 14, 1971. On December 18, 1971, Craig employed J. Arnot Hill to represent him in a suit against Burlington Northern. The portions of said contract pertinent to the issues before us stated:

"I, the said William E. Craig, hereby employ J. Arnot Hill as my attorney to prosecute my claim against the Burlington Northern Railroad in a claim for damages for injuries to my person sustained as the result of an accident which occurred on or about the 5th day of September, 1971, in Clay County, Missouri. ²

"As full compensation for his services, I agree to pay my said attorney a sum equal to 25% Of whatever amount may be recovered either by settlement, suit or compromise and I hereby authorize my attorney to file suit on the above claim."

On February 28, 1972, Hill filed a petition in one count in the Jackson County circuit court against Burlington Northern, Inc., alleging injury from both accidents. Sometime in 1972, Wilson joined Hill's firm, and took over the handling of Craig's case. ³ Hill did not know whether Wilson had had any prior FELA experience. Both Hill and Wilson had had trial experience, although Hill's experience was mostly in the criminal area. ⁴ Neither had ever litigated an FELA action like Craig's although Hill had settled three FELA actions before trial. As detailed later herein, Craig became dissatisfied with their representation.

On July 5, 1973, Craig informed Wilson that he had decided to employ Gardner, who had had broad experience in FELA litigation. Craig and Gardner entered into a contract on July 9, 1973. In relevant part the contract stated that Craig hired Gardner to represent him in:

"the presentation and prosecution of a certain cause of action he has against Burlington Northern Railroad Co., Inc. and against all others liable for personal injuries and damages on or about the 5th day of September and the 14th of September both in 1971, caused by the negligence of said company . . .

. . . and for its attorney fees second party Gardner shall have thirty-five percent of all sums before case is set for trial and 40% Thereafter, after deducting doctor and hospital bills incurred for the purpose of preparing and presenting said claim . . . and in case nothing is recovered, the Second Party shall have nothing for his fees and expenses . . ."

Added to the top of the contract, in longhand, appeared the following sentence:

"It is understood that 2nd party shall pay out of its fee any sums due and owing to other attorneys now employed by first party, but does not agree to defend any suit for attorney fees brought on behalf of other attorneys."

On July 30, 1973, Craig wrote Hill and Wilson, dismissing them as his attorneys. Gardner amended the petition previously filed by Hill extensively, including dividing the suit into two counts, one for each accident. Count I was for the first accident, claiming negligence on the part of the railroad in failing to provide a safe place to work and count II was for the second accident, claiming violation of the federal Safety Appliance Act, where negligence and contributory negligence are immaterial.

On November 12, 1973, a jury returned a verdict for Burlington Northern on the September 5, 1971 accident, but for Craig on the September 12, 1971, accident, in the amount of $20,800.00. ⁵

On November 16, 1973, Burlington filed this interpleader action to determine to whom it should pay the judgment. It paid the sum of the judgment, plus interest, into court, and was dismissed from the action. The money was invested and ultimately grew to $24,385.04. At the conclusion of the interpleader hearing, September 9, 1976, the circuit court allowed the Railroad Retirement Board $2,514.60 in reimbursement for the sickness benefits paid Craig by it prior to suit, assessed court costs of $32.50 against the fund, allowed $8,320.00 in attorneys fees (40% Of $20,800.00), of which $5,200.00 (25% Of $20,800.00) went to Hill and the balance of $3,120.00 to Gardner (the court determined that Hill's fee should come from Gardner's share because of Gardner's promise to pay any attorneys fees due and owing by Craig at the time of his employment of Gardner), $3,774.35 to Gardner for expenses incurred and the balance of $9,753.59 to Craig. Both Hill and Gardner appealed, raising the issues noted above. With the exception of the $5,200.00, the fund has been disbursed to the parties in the respective amounts stated above.

I.

The main controversy is between the opposing lawyers over who receives what fee, into which dispute are interwoven charges and counter charges as to unethical conduct and respective competency in handling railroad cases. Gardner contends Hill had no contract with Craig with respect to the cause of action on which recovery was had, that at the most there was an implied contract between Hill and Craig, on which the remedy would be in quantum meruit, that even then there was no substantial performance by Hill and that Craig was within his rights in discharging Hill. Hill contends that he had a contingent fee contract, represented Craig competently and is entitled to 25 percent of the amount recovered; that Gardner's conduct was "unbecoming", that he "snitched" or stole the case and erroneously assumed there was no substantial performance by Hill. To resolve these matters, we first must set forth more of the facts, particularly those bearing on what Craig's original lawyers, Hill and Wilson, did or did not accomplish on his behalf prior to their discharge.

Initially we note that the relation between a lawyer and his client is a delicate and exacting one, highly personal, 7 Am.Jur.2d Attorneys at Law, § 92, at 105 (1963). The cause of action or claim which is the subject of the contract between lawyer and client is the property of the client and not the attorney. Mills v. Metropolitan St. Ry. Co., 282 Mo. 118, 221 S.W. 1, 4 (1920). If plaintiff were dissatisfied with his attorneys he had the legal right to discharge them and employ other counsel, Allen v. Fewel, 337 Mo. 955, 87 S.W.2d 142, 145 (1935); In re Downs, 363 S.W.2d 679, 686 (Mo. banc 1963); McLaughlin v. McLaughlin, 427 S.W.2d 767, 768 (Mo.App.1968), subject to the attorney's right under certain conditions to be paid a fee, In re Downs, 363 S.W.2d at 686; In re Thomasson's Estate, 346 Mo. 911, 144 S.W.2d 79, 83 (1940).

The petition originally filed by Hill erroneously set forth the places where the accidents alleged to have been sustained by Craig occurred. Hill's petition alleged that both accidents occurred in a repair building the first while plaintiff in carrying out his duties as a switchman, was uncoupling a freight car in said building, and the second when he was again working in the same building and reached in to open a knuckle between freight cars when other cars were suddenly set in motion against him. Craig repeatedly pointed out to Hill and Wilson that the two accidents did not happen inside a building at all but occurred in the hump yard on what was known as No. 1 rip-track or repair track No. 1 north of the repair building. Craig himself drafted and delivered to Hill a proposed amendment, in which Craig named the specific paragraphs of the petition which should be amended, setting forth in direct and clear language what had happened and where it took place. Hill and Wilson, however, did nothing about amending the petition, nor did their interrogatories to the railroad inquire as...