Fleet Bank N.H. v. Chain Const. Corp.
| Decision Date | 28 December 1993 |
| Docket Number | BANK--N,No. 92-182,92-182 |
| Citation | 138 N.H. 136,635 A.2d 1348 |
| Parties | FLEETH. v. CHAIN CONSTRUCTION CORP. and another. |
| Court | New Hampshire Supreme Court |
Sullivan & Gregg, P.A., Nashua (Valerie A. Walsh, on the brief and orally), for plaintiff.
William E. Aivalikles, by brief and orally, pro se.
Fleet Bank--N.H. (Fleet) appeals from enforcement of an attorney's lien by the Superior Court (Groff, J.) ordering Fleet to pay a one-third contingent fee plus costs to Attorney William Aivalikles for his legal services in a collection action. Fleet argues that the trial court erred by: (1) enforcing Attorney Aivalikles' lien for attorney's fees against Fleet in the absence of an attorney-client relationship; (2) enforcing the lien in the absence of a fee agreement between Aivalikles and Fleet and without considering the reasonable value of Aivalikles' services; and (3) granting Aivalikles' motion to strike affidavits submitted with Fleet's motion for reconsideration and denying the motion for reconsideration. We conclude that Aivalikles did not represent Fleet, and that Fleet did not ratify the contingent fee agreement between Aivalikles and others. Consequently, we reverse.
In November 1990, Fleet, as secured creditor of Nightingale Roofing, Inc. (NRI), seized its accounts receivable including the Chain Construction Inc. (Chain) account. In early February 1991, John Nightingale (Nightingale), principal of NRI, recovered files from Fleet for several accounts, including the Chain account, to perfect mechanic's liens. Nightingale hired Aivalikles to do the legal work and signed a one-third contingent fee agreement. Aivalikles immediately notified Fleet's counsel by letter that he had been retained by NRI to perfect the mechanic's liens on a one-third contingent fee basis. Within days, Aivalikles moved for ex parte real estate attachments to perfect mechanic's liens for NRI's accounts with Chain, Beaver Construction, and Stabile Construction.
Approximately three weeks after perfecting the mechanic's liens, Aivalikles was told that Fleet did not want him to pursue collection of these accounts. On April 10, 1991, Fleet's counsel sent Aivalikles a letter confirming that Fleet did not want him to continue the collection efforts and asking him to withdraw his appearances in the three cases. Nightingale, on behalf of NRI, sent Aivalikles a letter on April 11 instructing Aivalikles not to turn over the collection cases to Fleet. Again on May 6, Fleet's counsel sent Aivalikles a letter reminding him that he had no authority to handle the collections on behalf of Fleet. Aivalikles appeared at court hearings during this time to defend the attachments for each lien following the direction of his client. Fleet did not enter an appearance in the cases and did not send a representative to scheduled hearings despite being notified. Aivalikles successfully defended the mechanic's lien for the Chain and Beaver accounts and agreed to the substitution of a bond in the Stabile account.
In May 1991, NRI, Nightingale and Fleet entered into an agreement that settled the dispute concerning NRI's outstanding debt. As part of the agreement, Nightingale deposited $120,000 into an escrow account held by Fleet, and accounts collected, net of costs and attorney's fees generated by the collection process, were credited to the account. In a separate agreement, Fleet agreed that Nightingale could continue collection efforts on several accounts receivable including the Chain account. By early September, Nightingale and Jeff Mintz of Chain had worked out a tentative settlement of the Chain account receivable. The parties dispute Aivalikles' role in the settlement. During the settlement process, Fleet's counsel notified Aivalikles by letter dated October 18, 1991, to "cease any and all further action in regard to the property of Fleet Bank--NH and, more specifically, the present accounts receivable involving Chain Construction, Inc. and H. J. Stabile and Son, Inc." The Chain account was ultimately settled for $45,000, although Fleet collected only $11,800 after payments to NRI's subcontractors. Aivalikles demanded $15,000 as his one-third contingent fee, plus costs of $276.42. Fleet refused to pay the contingent fee and instead offered $3900, which Aivalikles declined.
Aivalikles filed a motion to enforce his attorney's lien, pursuant to RSA 311:13 (1984), to recover a one-third contingent fee plus costs from the amount of the settlement. His claim was based solely on the contingent fee contract, and he did not claim, alternatively, that he was entitled to the reasonable value of his services based on a theory of quantum meruit or unjust enrichment. Following Fleet's objection and a hearing on the matter, the trial court found that "Fleet Bank, by its conduct, ratified the retaining of Attorney Aivalikles as attorney to collect the claims on the basis of a one-third contingent fee." The court ordered Fleet to pay the full fee plus costs. Fleet moved for reconsideration with further support for its objection to Aivalikles' claims including affidavits. Aivalikles objected and moved to strike the affidavits. The court granted Aivalikles' motion to strike the affidavits and denied Fleet's motion for reconsideration.
On appeal, Fleet argues that it was error for the trial court to enforce Aivalikles' attorney's lien in the absence of an attorney-client relationship between Aivalikles and Fleet. Fleet also assigns as error the trial court's decision to enforce the attorney's lien for a contingent fee when Fleet and Aivalikles did not have a fee agreement. Aivalikles counters that Fleet is bound by the fee agreement due to Fleet's acquiescence and ratification of the agreement.
We review the trial court's factual findings as a mixed question of fact and law under the clearly erroneous standard. Great Lakes Aircraft Co. v. City of Claremont, 135 N.H. 270, 282, 608 A.2d 840, 848 (1992). Findings of fact are clearly erroneous if unsupported by the evidence. Riverwood Commercial Prop's v. Cole, 134 N.H. 487, 490, 593 A.2d 1153, 1156 (1991). Legal determinations and the application of law to fact are reviewed independently for plain error. Great Lakes Aircraft Co. v. City of Claremont supra. Our inquiry is to determine whether the evidence presented to the trial court reasonably supports the court's findings, and then whether the court's decision is consonant with applicable law.
In this case, Aivalikles was hired by NRI not Fleet, and the...
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