Estate of Boyle v. Wickhem, Buell, Meier, Wickhem and Southworth, S.C.

• Decision Date: 15 October 1986
• Docket Number: No. 85-1505,85-1505
• Citation: 134 Wis.2d 214,397 N.W.2d 124
• Parties: In the Matter of Attorney's Fees in Gary F. Kunz and Judy Kunz v. Twin City Fire Insurance Company, Planet Insurance Company, Borvig Corporation, a foreign corporation, Borvig Vilhar and Gerhard Gunter Schulz. ESTATE OF Donald F. BOYLE, Appellant, v. WICKHEM, BUELL, MEIER, WICKHEM AND SOUTHWORTH, S.C., Respondents.
• Court: Wisconsin Court of Appeals

Page 124

397 N.W.2d 124

134 Wis.2d 214

In the Matter of Attorney's Fees in Gary F. Kunz and Judy Kunz v. Twin City Fire Insurance Company, Planet Insurance Company, Borvig Corporation, a foreign corporation, Borvig Vilhar and Gerhard Gunter Schulz ESTATE OF Donald F. BOYLE, Appellant, v. WICKHEM, BUELL, MEIER, WICKHEM AND SOUTHWORTH, S.C., Respondents.

No. 85-1505.

Court of Appeals of Wisconsin.

Argued June 12, 1986.

Opinion Released Oct. 15, 1986.

Opinion Filed Oct. 15, 1986.

Review Denied.

Ruetz, Lehner, Davison & Mulligan, S.C., Kenosha, for appellant; William J. Ruetz, of counsel.

Kasdorf, Lewis & Swietlik, S.C., Milwaukee, for respondents; J. Ric Gass and Michael J. Hicks, of counsel.

Before SCOTT, C.J., BROWN, P.J., and NETTESHEIM, J.

NETTESHEIM, Judge.

The estate of Donald F. Boyle appeals an order dividing an escrow account between the estate and the law firm of Wickhem, Buell, Meier, Wickhem and Southworth, S.C. (Wickhem). ^1. Because we conclude that the trial court lacked the requisite personal jurisdiction over the estate, we reverse. ^2.

In September, 1982, Gary and Judy Kunz retained Donald Boyle to handle their claims arising out of Gary's personal injuries. Subsequently, Boyle contracted with the Wickhem law firm to assist him in pursuing the Kunzes' claims. Boyle and Wickhem agreed in writing to be equally responsible for the services and disbursements arising from the Kunz case and to equally split any fee resulting. Unfortunately, Boyle became seriously ill and died in April, 1983. The Kunz case proceeded to trial in August, 1984, resulting in a substantial verdict favorable to the Kunzes. A post-verdict settlement, in the form of a structured settlement, was then agreed to by the parties to the personal injury action. The trial court approved the settlement on October 30, 1984 and the resulting attorney's fees totaled over $1.6 million. The trial court reserved jurisdiction to resolve any future disputes regarding attorney's fees. ³ Because of a dispute over the division of the attorney's fees, the estate and Wickhem agreed to disburse $800,000 to Wickhem and $30,000 to the estate and to place the remaining $770,000 in an escrow account.

Wickhem then petitioned the trial court to distribute the escrowed funds, arguing that the estate was only entitled to the value of the services actually performed by Boyle or $28,000. The estate immediately objected to the trial court's personal jurisdiction. The court concluded that it had jurisdiction and adjudicated the dispute. The estate asserted that it was entitled to a fifty percent share of the fee pursuant to the agreement between Boyle and Wickhem. The trial court concluded that the contract between Boyle and Wickhem was a "personal services" contract, therefore limiting the estate's recovery to $64,000 under the theory of quantum meruit.

Wickhem grounds the assertion that the trial court had the requisite jurisdiction to determine this matter on sec. 102.29, Stats., the trial court's inherent authority, and the estate's waiver of any jurisdictional requirements. We address these issues seriatim.

Gary was injured in an employment related accident. The instant action, however, is not directed against his employer under the worker's compensation act. Rather, this proceeding is a tort action against third parties allegedly responsible for the injuries sustained. Section 102.29, Stats., provides in relevant part:

(1) The making of a claim for compensation against an employer or compensation insurer for the injury or death of an employee shall not affect the right of the employe ... to make claim or maintain an action in tort against any other party for such injury or death.... The employer or compensation insurer who shall have paid or is obligated to pay a lawful claim ... shall have the same right to make claim ... against any other party for such injury or death.... Each shall have an equal voice in the prosecution of said claim, and any disputes arising shall be passed upon by the court before whom the case is pending....

Wickhem argues that although it is not expressly provided in sec. 102.29, the spirit of the statute allows the trial court to resolve any fee dispute arising as a result of the action against the nonemployers.

The meaning of a statute is a question of law which we will decide independent of the trial court's conclusions. State v. Denter, 121 Wis.2d 118, 122, 357 N.W.2d 555, 557 (1984). The primary source of construction is the language of the statute itself. Id. at 123, 357 N.W.2d at 557. Generally, rules of construction are used only to determine the meaning of an ambiguous statute. State v. Tollefson, 85 Wis.2d 162, 167, 270 N.W.2d 201, 203 (1978). A statute is ambiguous only if reasonable persons could disagree as to its meaning. Kollasch v. Adamany, 104 Wis.2d 552, 561, 313 N.W.2d 47, 51-52 (1981). We conclude the statute is clear and unambiguous.

Wickhem argues that sec. 102.29, Stats., authorizes the trial court to adjudicate disputes between attorneys jointly representing an injured employee in a tort action. However, the statutory language simply states that the worker's compensation law does not defeat the already existing subject matter jurisdiction of circuit courts over claims asserted by injured parties against nonemployers allegedly responsible for the injury. The statute does not purport to vest circuit courts with authority, inherent or expressed, to litigate these types of fee disputes as incidental to the worker's compensation law.

Wickhem cites Bergren v. Staples, 263 Wis. 477, 57 N.W.2d 714 (1953), in support of the claim that sec. 102.29, Stats., authorizes the trial court action. In Bergren, the supreme court held that the trial court's authorization under sec. 102.29 to resolve any disputes arising between the employee's representative and the worker's compensation insurer gave it the power to order the compensation insurer to join in accepting a settlement offer which had already been accepted by the employee's representative. Wickhem's reliance on Bergren is misplaced because it, unlike this case, involved a dispute between a worker's compensation carrier and an employee's representative.

Next, Wickhem argues that the trial court's inherent authority gives it the power to resolve this dispute.

Powers of the court can be inherent or can be derived from the common law or from a statute. For a power to be inherent, it must be essential to the existence of the court and necessary to the orderly and efficient exercise of the court's jurisdiction. Examples of inherent powers are the power to summon witnesses, to administer oaths, to provide counsel for the indigent, and to discipline attorneys.

State v. Braunsdorf, 92 Wis.2d 849, 851, 286 N.W.2d 14, 15 (Ct.App.1979) (citations omitted). See also Jacobson v. Avestruz, 81 Wis.2d 240, 247, 260 N.W.2d 267, 270 (1977).

The trial court's inherent power does extend to cases where there is a direct attorney-client conflict regarding the attorney's right to a portion of a judgment. See Freyer v. Mutual Benefit Health & Accident Ass'n, 45 Wis.2d 106, 172 N.W.2d 338 (1969). In Freyer, the supreme court held that an attorney's recovery under a statutory attorney's lien was limited to the fees arising from that case. There, Freyer's attorney attempted, under the attorney lien statutes, to withhold from Freyer's settlement proceeds moneys owed by Freyer to the attorney arising out of both current and earlier litigation. The court concluded that "the [trial] court had no jurisdiction to order the settlement disbursed so as to cover legal fees in another case or a judgment in another case." Id. at 110, 172 N.W.2d at 340-41. The implied holding of Freyer is that the trial court had jurisdiction to resolve fee disputes between a client and the attorney arising out of contemporaneous litigation. Such is not the case here.

Wickhem also points out that the trial court's inherent authority to resolve attorney fee disputes applies in successor attorney situations. See Knoll v. Klatt, 43 Wis.2d 265, 168 N.W.2d 555 (1969) (overruled on other...