Downs v. Hodge

• Decision Date: 02 February 1967
• Docket Number: No. 24500,24500
• Citation: 413 S.W.2d 519
• Parties: John DOWNS et al., Plaintiff-Respondents, v. William F. HODGE, and State Farm Mutual Insurance Company, Defendant-Appellant.
• Court: Missouri Court of Appeals

Page 519

413 S.W.2d 519

John DOWNS et al., Plaintiff-Respondents, v. William F. HODGE, and State Farm Mutual Insurance Company,

Defendant-Appellant.

No. 24500.

Kansas City Court of Appeals, Missouri.

Feb. 2, 1967.

Motion for Rehearing and/or Transfer to Supreme Court Denied

April 3, 1967.

O. W. Watkins, Jr., Strop, Watkins, Roberts & Hale, St. Joseph, for appellant.

Don Pierce, Downs & Pierce, St. Joseph, for respondents.

SPERRY, Commissioner.

Plaintiffs are members of the bar of Buchanan County, and are partners engaged in the practice of law in St. Joseph, Missouri. Defendant is engaged in the business of writing casualty and other insurance in Missouri. Plaintiffs sued defendant and a Mr. Hodge for $1,000.00, same being the amount claimed due them for having represented Hodge in a suit by him against a Mr. Fender for personal injuries growing out of an automobile accident. Fender's liability was insured by defendant. Plaintiffs pleaded their contract with Hodge for a contingent attorney fee of thirty three and one third percent of any recovery obtained against Fender, either by judgment or compromise. They alleged their notification of defendant of their contract and of the eventual compromise settlement of the claim for $3,000.00 and that defendant had paid out the full sum of the above settlement to others than plaintiffs without having 'protected' plaintiffs' claim. Plaintiffs later dismissed as to Hodge and obtained a jury verdict, and judgment thereon, against the insurance company which we will refer to herein as defendant. Defendant appeals.

Defendant urges error based on the court's failure to sustain its motion for a directed verdict at the close of all of the evidence, on the grounds that plaintiffs failed to make a submissible case of an attorneys' lien against State Farm Mutual Insurance Company; that attorneys' liens provided by the statute in Missouri confer no rights against the liability insurer of Mr. Fender.

Defendant also contends that the court erred in excluding the testimony of one of its attorneys regarding a statement made to him by one James Steele, an attorney associated with plaintiffs in the practice of law, who participated with plaintiff Pierce in the trial of the Hodge-Fender damage suit. The statement that Steele is said to have made to defendants' attorney after the damage suit was tried and the jury found against Hodge, was that plaintiffs were no longer interested in the case and considered themselves well rid of Hodge.

Mr. Downs presented plaintiffs' case, which rests almost entirely on the testimony of Mr. Pierce and on documents contained in plaintiffs' files relating to the case of Hodge v. Fender, which case was tried by Mr. Pierce assisted by Steele, and of documents relating to the instant case.

There was evidence to the effect that plaintiffs' law firm, on April 27th, 1961, was contacted by Mr. Hodge regarding his claim for damages against Mr. Fender when the latter's automobile 'rear ended' the Hodge automobile while it was standing behind a school bus on highway 36, east of St. Joseph; that Mr. Steele, who was an attorney employed on a salary basis by plaintiffs, procured the execution of a contract of legal employment of plaintiffs for their representation of Mr. Hodge on a contingent fee of thirty three and one third percent of any sums recovered for Hodge by plaintiffs whether by settlement or by judgment; that plaintiffs negotiated with defendant for a settlement of the claim but that no settlement was reached; that plaintiff took Hodge's statement as to the details of the collision; that they compiled a list of medical and other expenses of Hodge, interviewed witnesses, took depositions, obtained medical evidence of the nature and extent of his injuries, took pictures of the scene of the accident, prepared and filed a petition for damages, appeared in court at Chillicothe and 'tried' the case. The evidence was to the effect that Mr. Pierce had charge of the case, from its inception and throughout the trial, but that he was assisted by Mr. Steele who prepared the pleadings and assisted in other ways under Mr. Pierce's direction. It was shown that plaintiffs either paid or became obligated to pay a number of items of expense in connection with the preparation, filing, and trial of the damage suit; that the jury's verdict was adverse to Hodge; that plaintiffs filed a motion for a new trial; that Mr. Pierce presented the motion and argued it to the court; that Mr. Hodge was present at that hearing; that Hodge had told Mr. Pierce that he would like to consult Mr. Lance, another attorney; that Pierce consented; that Lance was in court when the motion for new trial was argued by Pierce but that he did not actively participate in the proceedings; that the motion was sustained. Plaintiffs investigated the case, filed all pleadings therein, took depositions, procured medical and other testimony, hired local counsel at Chillicothe, tried the case, filed and argued the motion for new trial and procured an order granting same, all with no assistance from anyone except Mr. Steele, who was their paid employee and who, at all times, acted under their supervision and direction.

Mr. Pierce stated that, prior to the trial, defendant offered $2,500.00 in settlement, which was rejected, and that eventually, it offered $3,000.00, which Hodge refused to accept; that, throughout the court proceedings, defendant was represented by attorneys Cleaveland & Collins; that the court's letter announcing that a new trial had been ordered was addressed to Downs & Pierce and to Mr. Collins, no one else; that Lance had told Pierce that Hodge had consulted him and that Pierce welcomed Lance's assistance in the case; that Lance wrote, asking for certain papers in the file, which were furnished; that Lance filed a motion for change of venue; that, a short time prior to the date the case was set for trial in Davies County, Lance wrote plaintiffs that he would see them within a few days regarding their participation in the trial of the case; that he next learned that the case had been settled and the entire proceeds had been paid out to Lance and Hodge; that plaintiffs had not been reimbursed for sums they had expended on the case, nor had they received any fee.

On cross examination Mr. Pierce stated that, after the adverse verdict was awarded, he told Hodge that plaintiffs would file motion for a new trial and that it would probably be granted; that he did not tell Hodge that he would have nothing further to do with the case and washed his hands of it; that he did tell him that he made a poor witness; that he did not tell Lance that he was through with the case; that Lance asked for and was given documents from plaintiffs' files; that Lance informed him that he would confer with plaintiffs about their active participation in the next trial.

Mr. Cleaveland testified for defendant to the effect that Steele assisted Pierce in the trial of the case; that witness never negotiated with Steele, alone, or separately, regarding settlement of the case; that Pierce was in control of the case at all times. Defendant offered to prove by Cleaveland that he had a conversation with Steele, after the new trial was ordered; that Steele stated that plaintiffs no longer represented Hodge, and that they were well rid of him. The court denied the offer on the grounds that, while Steele was an associate of plaintiffs in their office, there was no showing that he had authority to make the statement, and that witness had stated that Pierce was, at all times, in control of the litigation.

The witness testified to the effect that Pierce told him, in the court room at Chillicothe, in the presence of the Circuit Judge, at the time when the motion for new trial was argued, that plaintiffs no longer represented Hodge, that their employment had been terminated, and that they were well rid of Hodge. He stated that, thereafter, witness dealt with Lance on questions and matters arising in the Hodge case.

On cross examination Cleaveland admitted that after the above conversation occurred, the judge wrote a letter to Downs & Pierce, informing them of his action; that the letter was addressed to Downs & Pierce alone with copies to witness and to Hess & Collins; that no other lawyer's name (Lance) was mentioned in the letter advising of the court's action. He admitted that, in February, 1964, (some two years after the jury trial was held) he received a letter from Lance offering to settle the case for $6,500.00 and that copies went to Downs & Pierce and to Hess & Collins; that he had previously offered to settle the case with Pierce for $3,000.00, which offer was refused; that, in February, 1964, he settled the case with Lance for $3,000.00. He stated that he did not know whether plaintiffs had ever withdrawn as 'attorneys of record'; that, while he represented Fender in this case, defendant insurance company was his client and paid him for his services.

Pierce was called as a witness by defendant and stated that Steele was employed on salary by plaintiffs during the above period, as attorney. Mr. Hodge testified to the effect that Pierce told him, after the jury trial was concluded, that he was through with the case and washed his hands of it, and that, later, Pierce repeated that statement; that witness told Pierce he would retain Lance as attorney; that, thereafter, he did not talk to Pierce; that he received $3,000.00 in settlement of the case.

Lance testified to the effect that Hodge requested him to represent him; that he rode to Chillicothe with Pierce who argued the motion for new trial; that, two weeks prior to settlement of the case, he sent plaintiffs and Hess & Collins, a copy of a letter written to Cleaveland proposing a settlement for $6,500.00; that he had frequently written Pierce asking for documents from his files; that he wrote Pierce shortly before the new trial was to be had at Gallatin to...