Goldman v. Home Mut. Ins. Co.

• Decision Date: 04 February 1964
• Citation: 126 N.W.2d 1,22 Wis.2d 334
• Parties: Lowell S. GOLDMAN, Appellant, v. HOME MUTUAL INSURANCE CO., a domestic corp., Respondent.
• Court: Wisconsin Supreme Court

Page 1

126 N.W.2d 1

22 Wis.2d 334

Lowell S. GOLDMAN, Appellant, v. HOME MUTUAL INSURANCE CO., a domestic corp., Respondent.

Supreme Court of Wisconsin.

Feb. 4, 1964.

Harry Halloway, Milwaukee, for appellant.

Byrne, Bubolz, Spanagel & Pfankuch, Appleton, for respondent.

BEILFUSS, Justice.

The principal issue is,--does the complaint state facts sufficient to constitute a cause of action?

The rules for testing a complaint upon demurrer on this ground, so often stated they need no citation, are: (1) facts alleged are assumed to be true; (2) the complaint is to be liberally construed and given the benefit of every reasonable inference; and (3) if the complaint states any cause of action the demurrer must be overruled.

This complaint suggests two possible causes of action, one for attorney's fees under statutory lien sec. 256.36, Stats., and the other for damages for interference with contractual rights of third persons.

Statutory lien for attorney's fees

Secs. 256.36, 256.37 and 256.38, Stats., set forth our statutory authority for attorneys' liens.

Sec. 256.38, Stats., provides in substance that no settlement in a personal injury or wrongful death action shall be valid unless consented to by the attorney appearing for the claimant or by order of the court. This section has no application here for the reason no action on the claim had been started.

Sec. 256.36, Stats., creates the lien:

'Lien on proceeds of action to enforce cause of action. Any person having or claiming a right of action sounding in tort or for unliquidated damages on contract, may contract with any attorney to prosecute the same and give such attorney a lien upon such cause of action and upon the proceeds or damages derived in any action brought for the enforcement of such cause of action, as security for his fees in the conduct of such litigation; when such agreement shall be made and notice thereof given to the opposite party or his attorney no settlement or adjustment of such action shall be valid as against the lien so created, provided that such agreement for fees shall be fair and reasonable, and this section shall not be construed as changing the law in respect to champertous contracts.'

In so far as a statutory lien is concerned, Goldman's complaint alleges only that he was retained by the claimant to prosecute the claim for personal injuries against Home Mutual and that he, Goldman, notified Home Mutual of such retainer. Under the statute the contract must have two material provisions. The claimant must agree to retain the attorney to prosecute his claim and must 'give such attorney a lien upon such cause of action and upon the proceeds or damages derived in any action brought for the enforcement of such cause of action.' Mr. Goldman does not allege that Saunders agreed to give him a lien. An allegation of retainer is not sufficient to imply an agreement for a lien.

Sec. 256.36, Stats., further provides, 'when such agreement shall be made and notice thereof given to the opposite party or his attorney no settlement or adjustment of such action shall be valid as against the lien so created.' A mere notice by the attorney that he has been retained by the claimant is not sufficient notice of 'such agreement' to inform the opposite party of the lien.

An agreement for a lien and notice of the lien are prerequisites to creation and enforcement of the lien. The failure to allege them are fatal to a complaint to enforce the lien. This is not a case where terms of the contract are not set forth and the complaint is subject to motion to make more definite and certain. Morse v. Gilman (1863), 16 Wis. *504, *507; Young v. Lynch (1886), 66 Wis. 514, 29 N.W. 224. The facts alleged in this complaint do not establish the basic requirement of the creation of the lien. The complaint is properly challenged by demurrer.

Interference by third person with contractual relations between attorney and client

The complaint states that an agent of Home Mutual wrongfully induced Saunders to breach his contract of retainer with Goldman by settling with Saunders without consent of Goldman.

Home Mutual contends that the adoption by the legislature of the attorney lien statutes supersedes the right of the attorney based upon interference with contract and that lien statute is the exclusive remedy available to the attorney. In support of this position it cites 1 C.J.S. Actions, § 6 b., p. 974:

'Where a code or statute creates a new right or liability that did not exist at common law or under prior statutes, and also provides a specific remedy for the enforcement thereof, as a general rule such statutory remedy is exclusive, * * *.'

However, § 6c. of the same citation provides (p. 976):

'Where a statute prescribing a remedy does not create a new right or liability, but merely provides a new remedy for an independent right or liability already existing, the general rule is that the remedy thus given is not regarded as exclusive but as merely cumulative of other existing remedies, and does not take away a preexisting remedy, or, as more specifically stated, if a statute gives a new remedy in the affirmative, and contains no negative, express or implied, of the old remedy, the new remedy is merely cumulative; and, in such a case, the party having the right may resort to either the preexisting or the new remedy, except that he cannot resort to inconsistent remedies; the right to use cumulative remedies does not obviate the defense of...