Olivarez v. Unitrin Property & Cas. Ins.
| Decision Date | 30 August 2006 |
| Docket Number | No. 2005AP2471.,2005AP2471. |
| Citation | 723 N.W.2d 131,2006 WI App 189 |
| Parties | Christine OLIVAREZ and Daniel J. Olivarez, Plaintiffs-Respondents, United Healthcare, Inc. and Ingenix Subrogation Services, d/b/a CT Corporation System, Involuntary-Plaintiffs, v. UNITRIN PROPERTY & CASUALTY INSURANCE COMPANY and Paul Kucza, Defendants, Cannon & Dunphy, S.C., Proposed-Intervenor-Appellant. |
| Court | Wisconsin Court of Appeals |
On behalf of the proposed-intervenor-appellant, the cause was submitted on the briefs of Terry E. Johnson, of Peterson, Johnson & Murray, S.C., of Milwaukee.
On behalf of the plaintiffs-respondents, the cause was submitted on the brief of James J. Gende II, of Gende Law Offices, S.C., of Waukesha.
Before SNYDER, P.J., and NETTESHEIM and ANDERSON, JJ.
The law firm of Cannon & Dunphy, S.C., appeals from an order denying as untimely its motion to intervene to enforce its attorney's lien in a negligence action that had settled. Were the question one of law, or were we ruling in the first instance rather than as an appellate body, we likely would rule for Cannon & Dunphy. But given the deference we must accord the trial court's discretionary call, we are constrained to affirm the trial court's ruling. Our reluctance is tempered, however, because even were we to conclude that the court's timeliness determination was erroneous, we would affirm on the ground that Cannon & Dunphy's interest, if any, was not impaired or impeded by the denial of its motion.
¶ 2 The facts are undisputed. James Gende joined Cannon & Dunphy as an associate attorney in May 2000. Gende and Cannon & Dunphy entered into an employment agreement governing the terms of Gende's employment. In April 2003 after being bitten by a dog, Christine Olivarez signed a retainer agreement with Cannon & Dunphy; Olivarez' personal injury file was assigned to Gende. Under the retainer agreement, Olivarez gave Cannon & Dunphy a lien pursuant to WIS. STAT. § 757.36 (2003-04)1 for one-third of her proceeds, should recovery be made on her claim, and agreed to reimburse Cannon & Dunphy for reasonable costs, expenses and disbursements.
¶ 3 In April 2004 Gende left Cannon & Dunphy to start his own practice. Olivarez elected to be represented by Gende. At the time Cannon & Dunphy transferred her file to Gende's new office, no lawsuit had been commenced.
¶ 4 Prior to his departure, Gende signed a separation agreement with Cannon & Dunphy setting forth the terms and conditions of the termination of his employment.2 It provided, in part, for a twenty/eighty split on former Cannon & Dunphy cases where the client elected Gende's representation: Gende would get twenty percent of the fees recovered, after payment of any referral fees due, and Cannon & Dunphy would get eighty percent. The separation agreement also provided that "current retainer agreements and liens are valid and binding on all clients of Cannon & Dunphy, S.C."
¶ 5 By letter dated May 14, 2004, Cannon & Dunphy notified Unitrin Property & Casualty Insurance Company, the defendant insurer, of Cannon & Dunphy's lien for fees and costs. On May 18, it sent a second letter to Unitrin, this one requesting that Cannon & Dunphy's name be included on any settlement check. Gende was copied on both letters.
¶ 6 Gende filed suit on behalf of Olivarez on June 7, 2004. Trial was set for March 22, 2005. On March 21, Gende notified Cannon & Dunphy's legal counsel by e-mail that the case had settled for $44,000. That same day, Cannon & Dunphy advised the defendants' attorney by telephone and by letter, on which Gende was copied, of Cannon & Dunphy's lien interest and its request to have its name included on the settlement check. The settlement check included Cannon & Dunphy's name and was sent to them for endorsement. Cannon & Dunphy endorsed the check and sent it with an accompanying letter dated April 6, 2005, stating that the check was endorsed "in trust under the express conditions that you pay all attorney fees and costs directly to us or hold all attorneys fees and all costs in escrow and immediately provide a copy of the client[-]signed settlement statement" to Cannon & Dunphy. On April 7, Cannon & Dunphy moved to intervene in the action to enforce its attorney's lien. The stipulation and order dismissing Olivarez' case was later signed on April 28.
¶ 7 Other motions relative to the case also were filed. On April 14, Olivarez moved to consolidate this case with a declaratory action filed by Gende against Cannon & Dunphy relating to separation agreement issues.3 On May 16, Cannon & Dunphy moved to strike an affidavit Gende had filed in opposition to Cannon & Dunphy's motion to intervene, and for sanctions. Although the underlying case was dismissed on April 28, the motions to intervene and to consolidate were not argued until May 23. The circuit court issued its oral decision on July 28 and entered its written order on August 23. The court denied Cannon & Dunphy's motion to intervene as untimely because the court "considers this case closed." It also denied Gende's motion to consolidate and Cannon & Dunphy's motion to strike and for sanctions. Cannon & Dunphy appeals.
¶ 8 Cannon & Dunphy contends that it meets all the requirements of the intervention statute and intervention therefore should have been granted as a matter of right. Specifically, it argues that the circuit court's untimeliness ruling is erroneous because it imposed "a standard for intervention that no litigant could meet" and failed to consider the prejudice prong of the timeliness analysis.
¶ 9 Gende opposes the intervention on grounds that it is a contract dispute between law firms, a clash discrete from the subject matter of the underlying tort action.4 Gende stridently challenges the employment and separation agreements as being unethical and against public policy, argues that such agreements cannot create a postsettlement statutory lien against a client, and contends that Olivarez's own retainer contract with Cannon & Dunphy failed to reserve a lien with that firm if she discharged it.
¶ 10 As we see it, the issues raised by the employment and separation "disagreements" not only are peripheral to our task but are not before us on this appeal. Instead, the narrow issue before us is whether the circuit court properly denied a motion for intervention as of right. The even narrower threshold issue is whether the circuit court properly exercised its discretion in denying as untimely Cannon & Dunphy's motion to intervene.
¶ 11 Intervention is "[t]he entry into a lawsuit by a third party who, despite not being named a party to the action, has a personal stake in the outcome." City of Madison v. WERC, 2000 WI 39, ¶ 11 n. 7, 234 Wis.2d 550, 610 N.W.2d 94 (quoting BLACK'S LAW DICTIONARY 826 (7th ed.1999)). The effect of intervention is to make the intervenor a full participant in the lawsuit. 59 AM.JUR.2D Parties § 160 (2002). Although it is not always the case, a settlement between the original parties generally precludes any right of intervention. Id., § 227.
¶ 12 WISCONSIN STAT. § 803.09(1)5 governs intervention as of right. The Wisconsin Supreme Court has interpreted it as establishing four requirements:
(1) timely application for intervention; (2) an interest relating to the property or transaction which is the subject of the action; (3) that the disposition of the action may as a practical matter impair or impede the proposed intervenor's ability to protect that interest; and (4) that the proposed intervenor's interest is not adequately represented by existing parties.
State ex rel. Bilder v. Township of Delavan, 112 Wis.2d 539, 545, 334 N.W.2d 252 (1983). The burden is on the party seeking to intervene to show that the factors are met, see Reid L. v. Illinois State Bd. of Educ., 289 F.3d 1009, 1017 (7th Cir.2002) ( FED.R.CIV.P. 24(a)),6 and to show circumstances justifying intervention at a late stage of the litigation. Sewerage Comm'n of Milwaukee v. DNR, 104 Wis.2d 182, 186, 311 N.W.2d 677 (Ct.App.1981). Failure to establish one element means the motion must be denied. Keith v. Daley, 764 F.2d 1265, 1268 (7th Cir.1985).
¶ 13 The application of the intervention statute to a given set of facts is a question of law subject to our de novo review. C.L. v. Edson, 140 Wis.2d 168, 175, 409 N.W.2d 417 (Ct.App.1987). We focus first on the timeliness factor here because that is the basis upon which Cannon & Dunphy's motion was denied.
¶ 14 Timeliness is not defined by statute, and there is no precise formula to determine whether a motion to intervene is timely. See id. at 178, 409 N.W.2d 417. The question of timeliness, therefore, is a determination necessarily left to the discretion of the circuit court. See Bilder, 112 Wis.2d at 550, 334 N.W.2d 252. The discretionary standard reflects the view that a circuit court, due to its proximity to the dispute, usually has a better sense of the case's factual nuances upon which a motion to intervene often turns. Butler, Fitzgerald & Potter v. Sequa Corp., 250 F.3d 171, 176 (2d Cir.2001).
¶ 15 Two factors play into a circuit court's discretionary determination of timeliness: whether, in light of all the circumstances, the proposed intervenor acted promptly, and whether the intervention will prejudice the original parties to the lawsuit. Bilder, 112 Wis.2d at 550, 334 N.W.2d 252. The "critical factor" is whether, under the circumstances, the proposed intervenor acted promptly. Id. Promptness can be further broken down into two factors: when the proposed intervenor discovered its interest was at risk and how far litigation has proceeded. See Roth v. LaFarge School Dist. Bd. of Canvassers, 2001 WI App 221, ¶ 17, 247 Wis.2d 708, 634 N.W.2d 882.
¶ 16 This case keenly illustrates how the standard of review defines our role. We therefore take a moment to...
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