Morfeld v. Andrews

• Decision Date: 26 May 1978
• Docket Number: No. 4803,4803
• Citation: 579 P.2d 426
• Parties: Pamela Rabeler MORFELD, Appellant (Plaintiff below), v. F. M. ANDREWS, Jr., Appellee (Defendant below).
• Court: Wyoming Supreme Court

Page 426

579 P.2d 426

Pamela Rabeler MORFELD, Appellant (Plaintiff below), v. F. M. ANDREWS, Jr., Appellee (Defendant below).

No. 4803.

Supreme Court of Wyoming.

May 26, 1978.

Charles M. Aron and Richard A. Hennig, Aron & Hennig, Laramie, for appellant.

G. J. Cardine, Cardine, Vlastos & Reeves, Casper, for appellee.

Before GUTHRIE, C. J., and McCLINTOCK, RAPER, THOMAS and ROSE, JJ.

McCLINTOCK, Justice.

Pamela Morfeld ¹ appeals from summary judgment entered by the district court of Fremont County, Wyoming, denying her claim for damages alleged to have resulted from conversion and breach of fiduciary duty by her attorney, F. M. Andrews, Jr. ² The principal issue in the appeal concerns the propriety of his retention of two stock certificates in Utah International, Inc., which had been delivered to him as attorney for Morfeld in the course of divorce proceedings instituted by her husband. Asserting that he had a valid attorney's lien on the certificates for unpaid legal services, Andrews refused to deliver the certificates until settlement of his claim for fees. After a divorce decree approving property settlement had been entered, the dispute as to fee had been settled ³ and the stock certificates delivered to Mrs. Morfeld, she commenced this action. On the basis of affidavits of both parties and answers of the plaintiff to interrogatories, the district court concluded that there were no genuine issues of fact and that Andrews was entitled to judgment as a matter of law. We shall affirm.

Andrews accepted employment as Mrs. Morfeld's attorney without any express agreement concerning his fees. In March of 1975, in a letter ⁴ reporting on progress of property settlement negotiations, he advised her that there had been no discussion of fees, that if there was a substantial lump settlement Mrs. Morfeld would be responsible for his fee out of the settlement, and that

" * * * I anticipate charging you 15% of any lump sum which we receive on your behalf. This is one of the things which we should settle between us before the case gets too far along."

Mrs. Morfeld did not respond to this suggestion concerning fees ⁵ although she did from time to time communicate with him by letter or by telephone with respect to matters that should be considered in reaching a settlement of property claims. On April 28 Andrews wrote that a settlement agreement had been worked out with her husband's attorney, a copy of which was enclosed, together with what was described as a short form of agreement settling his fee. This document, dated April 29 and in the form of a letter from Mrs. Morfeld to Andrews, stated that in consideration of Andrews' services in representing her in the divorce and negotiating a settlement satisfactory to her, "I agree to pay you 15% of any sums received as settlement. The said 15% does not include the value of household goods and personal effects." This letter was admittedly signed by Mrs. Morfeld although in answer to interrogatories she states that she signed it after

" * * * he explained to me that the reason I should sign it was that he needed evidence to show that he was not working for free. When I signed that agreement at his insistence, it was still with the understanding on my part that he and I would work something out that would be reasonable."

A decree of divorce was entered in favor of Mrs. Morfeld and on May 21, 1975 a copy thereof and other papers ⁶ were forwarded with letter by Andrews. He also enclosed a form of promissory note in the amount of $3,015 with the request that it be signed and returned. This was not done and on June 17 Andrews again wrote, advising of receipt from Mr. Morfeld's attorney of two stock certificates, one in Mrs. Morfeld's name for 300 shares and one in her name as trustee for Karey Ann, and that "(a)ccording to our agreement, I am to receive 15% of whatever property I have obtained for you in negotiating the settlement," that the stock was quoted at $65 per share on the date the agreement was signed, and the proper fee would be $3,900 instead of the $3,015 which had not taken into consideration the 100 shares issued to Karey Ann. He further advised that "I will require that I be paid before the stock is turned over to you."

On June 24, 1975 Mrs. Morfeld filed a complaint with the Grievance Committee of the Wyoming State Bar, which after investigation of the matter and conference with the parties issued a decision under date of February 6, 1976, advising that contingent-fee contracts were not usual in the area, disapproved the same and advised the parties that the matter of attorney fees was between them. ⁷ Following this advice, Andrews again wrote Mrs. Morfeld, suggesting that the matter be settled by payment of $2,500 or 50 shares of the stock. Charles M. Aron, her present counsel, was retained by her at an undisclosed date and thereafter a fee of $1,100 was agreed upon. Letter of Andrews dated February 26 transmitted the stock certificates on the understanding that Aron would cause sufficient shares of the stock to be issued in Andrews' name to equal a fee in that amount. Receipt thereof was acknowledged on March 2, with the statement that Mrs. Morfeld would settle in cash as soon as the shares could be liquidated. At an undisclosed date, the $1,100 was paid to Andrews and this action was commenced on July 2, 1976.

By count one of her action, Mrs. Morfeld sought to recover for the loss in value of the stock between the time Andrews received the certificate on May 16, 1975 and their delivery to Mrs. Morfeld. ⁸ Count 2 alleges that Andrews had acted willfully and deliberately, and with a knowing disregard of his fiduciary duty to plaintiff, acting in pursuit of his own interests to the detriment of plaintiff, and claimed general damages in the amount of $15,000 and exemplary damages of $5,000.

Section 29-1-102, W.S.1977 provides:

"An attorney has a lien for a general balance of compensation upon any papers of his client which have come into his possession, in the course of his professional employment, upon money in his hands belonging to his client, and upon money due to his client, and in the hands of the adverse party, in an action or proceeding in which the attorney was employed, from the time of giving notice of the lien to that party."

In Enos v. Keating, 39 Wyo. 217, 271 P. 6 (1929), reh. den., we held that this statute created both a retaining and a charging lien in favor of attorneys. In this case we are concerned only with whether the facts of the case gave rise to a retaining lien. Mrs. Morfeld argues that a valid contract is necessary to support the claim of lien and since the contract in this case for a contingent fee is invalid under the great weight of authority, it follows that Andrews could not assert a lien and his retention of the stock certificates was wrongful. We have no desire to disagree with the rule adopted by the great majority of decisions, said by counsel to represent the holding of some 28 different states, ⁹ and as did the Supreme Court of Oregon in Hay v. Erwin, 244 Or. 488, 419 P.2d 32, 33 (1966) "join the vast majority of the courts and hold that contingent fee contracts in divorce proceedings are invalid." We think that counsel mistakes the effect of such a holding as applied to the facts of this dispute.

If the parties never entered into a valid contingent-fee agreement either because, as contended by Mrs. Morfeld in her affidavit in resistance to motion for summary judgment, Andrews had represented that the letter agreement would be of no force and effect, or, as is more seriously argued in this court, that it was violative of public policy and therefore void, it does not in our opinion follow that there was no valid implied agreement for the payment of a reasonable attorney fee which would support the claim of lien.

We have referred to Mrs. Morfeld's answer to interrogatories in which she said that she signed the letter on the basis that it was not a real agreement, "it was still with the understanding on my part that he and I would work something out that would be reasonable." To us this represents a clear-cut example of a contract for payment of the reasonable value of Andrews' services, an agreement which we would consider valid and unenforceable. Even if nothing was said about fees, we think it the universal rule that the courts will find an agreement to pay the attorney the reasonable value of the services rendered.

"Lawyers are entitled to compensation for services rendered to their clients, and, in the absence of an express agreement as to the amount of the compensation, they are entitled to reasonable remuneration." 7 Am.Jur.2d, Attorneys at Law § 204, pp. 165-166.

Andrews proceeded to work under the implied arrangement until March 4, when he attempted to change the provision as to reasonable fees to a contingent fee of 15%. Whether that agreement be considered a nullity because there was no meeting of the minds or whether it is void because contrary to public policy, we believe it to be the better rule that such failure leaves the previous agreement in full force and effect. As stated in Tillman v. Talbert, 244 N.C. 270, 93 S.E.2d 101, 103 (1956):

"A subsequent illegal agreement by the parties cannot affect a previous fair and lawful contract between them in relation to the same subject. The change is regarded as a mere nullity, and as such cannot scathe the original contract. (Citation of supporting authorities omitted)"

Other examples of this rule are found in Tearney v. Marmiom, 103 W.Va. 394, 137 S.E. 543, 545-546 (1927) where the court held that a valid contract between plaintiff and an elderly and infirm man whereby plaintiff undertook to care for him, in return for which he would convey property to her at his death, was not voided by a subsequent illegal agreement to act as the decedent's common-law wife. The court held that plaintiff's right to recover under the first agreement was in no way...