Martinez v. Mintz Law Firm, LLC
| Decision Date | 31 May 2016 |
| Docket Number | Supreme Court Case No. 14SC1 |
| Citation | 2016 CO 43,371 P.3d 671 |
| Parties | Ramona MARTINEZ and Stevens Law Offices, Petitioners, v. MINTZ LAW FIRM, LLC and Eric Krajewski, Esq., Respondents. |
| Court | Colorado Supreme Court |
Attorneys for Petitioners: Fisher & Associates P.C., Jacob C. Eisenstein, Denver, Colorado
Attorneys for Respondents: Mintz Law Firm, LLC, Robin E. Scully, Lakewood, Colorado
Attorney for Amicus Curiae Colorado Trial Lawyers Association: Ogborn Mihm, LLC, Anna N. Martinez, Denver, Colorado
¶ 1 This case presents several novel issues arising from a dispute regarding an attorney's charging lien. After a contingent fee plaintiff's initial attorneys were discharged for cause and replaced by successor counsel, initial counsel asserted a lien against any settlement or judgment entered in the underlying action and in favor of the plaintiff. The underlying action was subsequently settled, and successor counsel filed a motion to void the lien. Initial counsel responded by moving to strike successor counsel's motion and to compel arbitration, based on an arbitration clause contained in initial counsel's contingent fee agreement with the plaintiff.
¶ 2 The district court ultimately concluded that this dispute was between initial and successor counsel, and thus, the arbitration clause contained in initial counsel's contingent fee agreement with the plaintiff did not apply. Having thus determined that the matter was properly before it, the court proceeded to determine whether initial counsel was entitled to any of the fees that it was seeking to recover. The court concluded that initial counsel was not entitled to such fees because it had been discharged for cause, and under the express terms of the contingent fee agreement, it had forfeited the right to those fees.
¶ 3 Initial counsel appealed, and a division of the court of appeals reversed. Martinez v. Mintz , No. 12CA1878, slip op. at 10, 2013 WL 6163635 (Colo. App. Nov. 21, 2013). As pertinent here, the division concluded that the present dispute was between initial counsel and the plaintiff. Id. at 6. Accordingly, the division concluded that the matter was subject to arbitration and that the district court had erred in denying initial counsel's motion to compel arbitration and in ruling on the merits of the issues presented. Id. at 8–9.
¶ 4 We granted certiorari and now reverse.1 We conclude that successor counsel's motion to void the lien at issue was properly filed in the underlying action and that the underlying action was a “proper civil action” within the meaning of section 12–5–119, C.R.S. (2015). In light of this determination, we further conclude that the lien dispute was between initial and successor counsel and that therefore, the matter (1) was not subject to arbitration pursuant to the arbitration clause in initial counsel's contingent fee agreement with the plaintiff and (2) was properly before the district court. Finally, we conclude that the record supports the district court's finding that initial counsel was not entitled to recover the fees that it was seeking.
¶ 5 Accordingly, we reverse the judgment of the court of appeals and remand this case for further proceedings consistent with this opinion.
¶ 6 After April Martinez fell in a stairwell at her apartment complex and injured her knee, she hired the respondents, Mintz Law Firm, LLC and Eric Krajewski (collectively, “Mintz”), to represent her in a personal injury action. April later died from pulmonary emboli that had formed in her leg and moved into her lung.
¶ 7 Thereafter, April's mother, petitioner Ramona Martinez (“Ms. Martinez”), retained Mintz to pursue a wrongful death action against the apartment complex, and Ms. Martinez and Mintz entered into a contingent fee agreement (the “Mintz–Martinez Agreement”) to document the engagement. As pertinent here, this agreement entitled Mintz to 33–1/3% of the gross recovery collected if the matter settled out of court. The agreement further provided, “In the event the Client terminates this contingent fee agreement without wrongful conduct by the Attorney which would cause the Attorney to forfeit any fee,” Mintz could ask the court to order Ms. Martinez to pay a fee based on the reasonable value of the services that Mintz had provided. And the agreement stated, “In the event of a dispute between Attorney and Client concerning any aspect of the Attorney/Client relationship including controversies over Attorney's fees, ... said dispute shall be submitted to final and binding arbitration pursuant to the Uniform Arbitration Act of 1975 as adopted by Colorado....”
¶ 8 Prior to filing a lawsuit on Ms. Martinez's behalf, Mintz received a $100,000 settlement offer from the apartment complex, but Mintz rejected that offer by making an $850,000 written counteroffer. (Ms. Martinez later testified that Mintz had rejected the offer without her authority.)
¶ 9 The apartment complex did not accept the counteroffer, and after a lengthy delay, Mintz filed a wrongful death action on Ms. Martinez's behalf against the complex. Several days later, however, Ms. Martinez discharged Mintz and hired petitioner Stevens Law Offices (“Stevens”) to represent her. Stevens notified Mintz in writing of Ms. Martinez's decision, after which Mintz filed a notice of lien on any settlement or judgment entered in the wrongful death case and in favor of Ms. Martinez. The claimed lien was in the amount of $33,333.33 in attorney fees and $1,530.21 in costs. The fee amount was based on the $100,000 offer that Mintz had previously rejected.
¶ 10 Stevens proceeded to litigate Ms. Martinez's wrongful death action and ultimately settled it for $110,000. Upon receipt of the settlement funds, Stevens deposited its 40% contractually agreed upon contingency fee into its trust account and disbursed the remaining 60%, less costs, to Ms. Martinez.
¶ 11 Thereafter, Stevens filed a motion in the underlying wrongful death action to void Mintz's attorney's lien. In response, Mintz filed a “Motion to Compel Arbitration and Motion to Strike Motion to Void Attorney's Lien.” In these motions, Mintz argued that Stevens did not have standing to move to void the lien because the instant dispute was between Mintz and Ms. Martinez and not between Mintz and Stevens. Mintz further asserted that the dispute was subject to the arbitration clause in the Mintz–Martinez Agreement and that even if Stevens' motion were amended to substitute Ms. Martinez as the movant, the court “must refer the dispute to arbitration as required by the contract and applicable Colorado law.”
¶ 12 The district court denied Mintz's motions. The court noted that Mintz purported to hold an enforceable lien against all third parties, including Stevens. Thus, Stevens had standing to challenge the lien. In addition, the court found that the Mintz–Martinez Agreement did not purport to bind anyone other than Mintz and Ms. Martinez, and therefore, the arbitration clause did not apply to the present dispute. The court thus concluded that it had jurisdiction and ordered Mintz to file a response to Stevens' motion to void Mintz's attorney's lien.
¶ 13 The matter proceeded to an evidentiary hearing after which the court reaffirmed its prior ruling that because the dispute was not between Ms. Martinez and Mintz, it was not subject to the arbitration clause. In addition, the court found that Mintz had been terminated for cause, and therefore, under the terms of the Mintz–Martinez Agreement, Mintz had forfeited any entitlement to attorney fees. Finally, the court found that Mintz's lien on the settlement funds held by Stevens was frivolous, and the court awarded Stevens fees and costs.
¶ 14 Mintz appealed, and a division of the court of appeals reversed. Martinez , slip op. at 10. As pertinent here, the division concluded, contrary to the district court, that the dispute over the funds at issue was between Mintz and Ms. Martinez and not between Mintz and Stevens. Id. at 6. The division thus concluded that the arbitration clause of the Mintz–Martinez Agreement continued to apply and that “any issues regarding the reasonableness of the agreement and whether Mintz had forfeited its fee or had been terminated for cause were matters for the arbitrator.” Id. at 8–9.
¶ 15 We subsequently granted Ms. Martinez's and Stevens' petition for certiorari.
¶ 16 Because the issue implicates the district court's jurisdiction to hear the current dispute, we first address whether the division erred in reversing the district court's denial of Mintz's motion to compel arbitration. We conclude that the district court correctly found that the dispute at issue was between Mintz and Stevens and not between Mintz and Ms. Martinez and that therefore, the arbitration clause in the Mintz–Martinez Agreement did not apply. We then address whether Ms. Martinez was personally liable to Mintz for the reasonable value of the services that it rendered under the Mintz–Martinez Agreement when, as here, Stevens received the full contingency fee. We conclude that because Mintz was discharged for cause, under the terms of the Mintz–Martinez Agreement, it was not entitled to fees.
¶ 17 We review de novo the district court's decision on a motion to compel arbitration, employing the same standards that the district court employed. Lujan v. Life Care Ctrs. of Am. , 222 P.3d 970, 972 (Colo.App.2009). Similarly, to the extent that Stevens' contentions require us to construe section 12–5–119, we construe those contentions de novo. See Klingsheim v. Cordell , 2016 CO 18, ¶ 14, ––– P.3d –––– (). And to the extent that Stevens' contentions implicate the district court's factual findings, we review such findings for clear error or an abuse of discretion, and we will not disturb those findings unless they are unsupported by the record....
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