Jasper v. Smith

• Decision Date: 14 September 1995
• Docket Number: No. 18998,18998
• Citation: 540 N.W.2d 399,49 A.L.R.5th 833
• Parties: Kenneth E. JASPER (real party in interest), Appellant, v. Belva J. SMITH, Plaintiff and Appellee, v. Dale C. FINCK, Defendant. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 399

540 N.W.2d 399

49 A.L.R.5th 833

Kenneth E. JASPER (real party in interest), Appellant, v. Belva J. SMITH, Plaintiff and Appellee, v. Dale C. FINCK, Defendant.

No. 18998.

Supreme Court of South Dakota.

Considered on Briefs Sept. 14, 1995.

Decided Nov. 15, 1995.

Mark S. Falk, Rapid City, for appellant.

Mary McCusker, Rapid City, for appellee.

GILBERTSON, Justice.

Kenneth E. Jasper appeals the circuit court's order releasing his attorney's lien against his former client's alimony award. Both parties to this appeal have also filed motions for appellate attorney's fees. We hold the trial court had the authority to determine the proper amount and means of enforcement of Jasper's lien and that such determination does not violate the public policy of this state. We affirm on Issues I and II and reverse and remand on Issue III.

FACTS AND PROCEDURE

Belva Smith hired attorney Kenneth E. Jasper to represent her in a divorce action against Dale Finck. Jasper filed the summons and complaint in March 1991. A trial in the matter commenced June 8, 1993, and after several continuances, concluded August 9, 1993.

On September 14, 1993, the trial court granted Belva Smith a divorce from Dale Finck. Smith was awarded $140,260 in assets, including rehabilitative alimony of $475 per month for 36 months and permanent alimony of $250 per month. The court ordered each party to pay its own attorney's fees.

Following conclusion of the divorce action, in January 1994 Smith informed Jasper that she no longer needed his services. Without Jasper's assistance, she collected money awarded her in the divorce action from an IRA, insurance policies, and alimony payment arrearages. Smith subsequently hired attorney Mary McCusker to represent her in some matters Smith claimed were omitted by Jasper during the divorce action; these matters were litigated October 28, 1994.

Jasper served notice of an attorney's lien on Smith, Finck, and Finck's attorney on June 22, 1994. This lien was in the amount of $22,307.75 and was filed against any money owed Smith by Finck, including alimony payments. Thereafter, Smith filed a motion to quash the lien and determine the attorney's fees. A hearing was held September 23 before the same court that granted Smith her divorce. On October 12, 1994, the court held the attorney's lien against Smith's alimony payments to be against public policy and quashed the lien. The court further found that it lacked the authority to determine the proper amount of attorney's fees due. Jasper brought this appeal.

STANDARD OF REVIEW

It is settled law that we review a trial court's findings of fact under the clearly erroneous standard. Cordell v. Codington County, 526 N.W.2d 115, 116 (S.D.1994). Under this standard, we will not disturb the court's findings unless they are clearly erroneous and, after a review of all the evidence, we are firmly and definitely convinced a mistake has been made. Id. We review conclusions of law under a de novo standard. Id. Under this standard, we give no deference to the trial court's conclusions of law. Id.

ANALYSIS AND DECISION

Jasper presents five issues on appeal:

1) Whether the trial court lacked personal and subject matter jurisdiction to quash the attorney's lien;

2) Whether the requirements of SDCL 16-18-22 had been met;

3) Whether SDCL 16-28-21 as applied against alimony awards violates public policy;

4) Whether a document, not authenticated or admitted into evidence at trial, may be incorporated into the court's findings of fact;

5) Whether there was sufficient evidence to support the court's order.

ISSUE I

Whether the court lacked personal and subject matter jurisdiction to quash the attorney's lien?

The trial court quashed Jasper's attorney's lien which had been filed against Smith's alimony award. Jasper argues the court lacked subject matter jurisdiction to decide the issue of his attorney's lien because it was a divorce proceeding, and as such, constituted a court of limited jurisdiction.

While this appeal was pending, our decision in Karras v. Alpha Corporation, 528 N.W.2d 397 (S.D.1995) was handed down. In Karras, we aligned ourselves with the majority of jurisdictions which hold that "an attorney's lien may be enforced either through a separate action or incident to the underlying litigation." Id. at 400 (see cases cited therein). In so holding, we specifically adopted the reasoning of the Colorado Supreme Court 'To restrict the means of enforcement of an attorney's lien solely to independent civil actions would be a waste of judicial time[.] ... The trial judge who heard the proceedings which gave rise to the lien is in a position to determine whether the amount asserted as a lien is proper and can determine the means for enforcement of the lien.'

Id. at 400-01 (emphasis in original) (quoting Gee v. Crabtree, 192 Colo. 550, 560 P.2d 835, 836 (1977)).

Gee addressed an action in which an attorney filed notice of an attorney's lien, at the conclusion of a divorce proceeding, to obtain compensation for his legal services in representing his client in that proceeding. This attorney subsequently filed a motion to obtain an order and judgment for his fees. The trial court denied the motion believing it lacked jurisdiction to decide the matter as part of the marriage dissolution proceeding. The Colorado Supreme Court reversed and remanded the trial court's decision stating:

The statutory lien rights which are granted to an attorney are such that an independent action can be the basis for enforcing the lien, but it is also clear that it is proper to assert the lien in the action in which the attorney performed the services.

Gee, 560 P.2d at 836 (citations omitted). Following this rationale of judicial economy and efficiency, this Court in Karras held an attorney's lien may not only be asserted in the action which gave rise to the claim, but may also be enforced by the same trial judge who heard the proceedings giving rise to the claim.

Whenever the decisional law upon which a judgment under appeal was based has been changed, we review and determine the issue presented to the trial court in the light of our recent decision. Klostergaard v. Peterson, 84 S.D. 215, 217, 169 N.W.2d 259, 261 (1969). The trial court stated in its order to quash that it had jurisdiction over matters involving the alimony award but that it did not have authority to determine the proper amount of attorney's fees owed Jasper by Smith. In light of our recent decision in Karras, we hold that the trial court in the divorce proceeding had subject matter jurisdiction to determine both whether the amount of the lien was proper and the means for the lien's enforcement.

Jasper argues the trial court did not have personal jurisdiction over Jasper to determine Jasper's attorney's lien. Jasper argues in his reply brief to this Court that he appeared before the trial court "for the sole purpose of objecting to the divorce court's jurisdiction over Attorney in relation to Debtor's motion to quash attorney's statutory lien." Appellant's Reply Brief at 6.

We first note the well-settled rule of law that states have personal jurisdiction over those persons residing within their boundaries. Pennoyer v. Neff, 95 U.S. 714, 724, 24 L.Ed. 565, 569 (1877), overruled on other grounds, Shaffer v. Heitner, 433 U.S. 186, 212, 97 S.Ct. 2569, 2584, 53 L.Ed.2d 683, 703 (1977). See also Burnham v. Super. Ct. of Cal., 495 U.S. 604, 611, 110 S.Ct. 2105, 2110-11, 109 L.Ed.2d 631, 639-40. SDCL 15-7-2(5) also subjects Jasper to this Court's jurisdiction by his conduct (state court has jurisdiction over a cause of action arising from entering into a contract for services to be rendered in this state).

In In re J.W.W., 334 N.W.2d 513 (S.D.1983), we recognized the elimination of the distinction between general and special appearances in South Dakota and further noted that jurisdictional defenses must be made by motion or answer, citing SDCL 15-6-12(b). "If objections to [personal] jurisdiction are not made at the appropriate time, either by motion or answer, they are deemed waived." Id. at 516, n. 4; see C.S. Foreman Co. v. H.B. Zachry Co., 127 F.Supp. 901, 902 (W.D.Mo.1955). Jasper failed to file a motion or answer to Smith's motion to quash preferring instead to respond orally at the motion hearing. We hold that the trial court had personal jurisdiction over Jasper in the matter of his attorney's lien.

ISSUE II

Whether the requirements of SDCL 16-18-22 had been met?

Jasper claims Smith did not comply with the statutory requirements of SDCL 16-18-22 ¹ by posting a bond in an amount double the sum of the lien, and argues these requirements are jurisdictional. Thus, Jasper reasons that the alimony may not be released from the attorney's lien. Our review of the hearing on Jasper's attorney's fees indicates Jasper raised this issue before the trial court and thus it is preserved for our appellate review.

Although we have not had prior need to interpret SDCL 16-18-22, we note that in general, a statutory bond must be construed for the purposes contained in that statute. State Sur. Co. v. Lensing, 249 N.W.2d 608, 611 (Iowa 1977); Nelson Roofing & Contracting, Inc. v. C.W. Moore Co., 310 Minn. 140, 245 N.W.2d 866, 868 (1976); Way v. Dep't of Motor Vehicles of State of Neb., 217 Neb. 641, 351 N.W.2d 46, 47 (1984); Giese v. Engelhardt, 175 N.W.2d 578, 586 (N.D.1970). The statute allows the trial court to set a bond in its discretion in a sum which includes a zero amount ("a sum double the amount claimed, or in such sum as may be fixed by a judge"). In this case that is exactly what the trial court did and proceeded to the lien issue on the merits. Given our decision in Karras and the authority of the trial court to set a zero bond, we hold that SDCL 16-18-22 is not jurisdictional as requiring the posting of a bond "double the amount claimed" under the lien. We further hold that the trial court did not abuse its discretion in...