Passer v. U.S. Fidelity & Guaranty Co.

• Decision Date: 13 February 1979
• Docket Number: No. 60608,60608
• Citation: 577 S.W.2d 639
• Parties: Bernard PASSER, Respondent, v. UNITED STATES FIDELITY & GUARANTY COMPANY, and Robert L. Shirkey, Appellants. and Jennie McCLEAN, Appellant, v. Bernard PASSER, Respondent.
• Court: Missouri Supreme Court

Page 639

577 S.W.2d 639

Bernard PASSER, Respondent, v. UNITED STATES FIDELITY & GUARANTY COMPANY, and Robert L.

Shirkey, Appellants.

and

Jennie McCLEAN, Appellant, v. Bernard PASSER, Respondent.

No. 60608.

Supreme Court of Missouri, En Banc.

Feb. 13, 1979.

Rehearing Denied March 13, 1979.

Robert L. Shirkey, pro se.

Jack B. Robertson, Kansas City, for appellants.

William H. Pickett, Pickett & Midkiff, Kansas City, for respondent.

FINCH, Senior Judge.

This consolidated appeal was ordered transferred under Mo.Const. art. V, § 10, after opinion by the Missouri Court of Appeals, Western District. It involves two cases concerned with Bernard Passer's claim that he was entitled to a statutory attorney's lien under § 484.140 ¹ in connection with his representation of Jennie McClean on her claim for personal injuries. Although we reach a result different than On June 4, 1966, McClean suffered serious injuries when an automobile in which she was a passenger and which was driven by Charles Gallipeau was involved in a collision. She was taken to Kansas City General Hospital. She knew Passer, having done some secretarial work for him, and the next morning she got in touch with him and asked him to come to the hospital. Passer did so and McClean asked him to help her in being transferred to Research Hospital. Passer said that in order to assist her he would have to become her counsel. McClean agreed to this. Passer produced a form contract of employment which McClean executed, thereby employing Passer to represent her and prosecute her claim against Gallipeau and the driver of the other vehicle, Houchins, on a 50% Contingent fee basis.

that reached by the court of appeals, we use portions of its opinion (without quotation marks) in stating the facts.

Passer wrote to Gallipeau on June 10, 1966, as follows:

"Dear Mr. Gallipeau:

"This is to advise you that I have been retained by Miss Jennie McClean to represent her in her claim against you for personal injuries received as a result of an automobile accident in which you were involved with another car driven by Clifford Houchins on or about June 3 or 4, at or near Seventh Avenue and Wyandotte Street.

"I will appreciate your forwarding this letter on to your carrier so that they will have a record of this lien.

"Thanking you, I remain,

Sincerely,

Bernard Passer"

As suggested in the letter, Gallipeau forwarded the letter to United States Fidelity & Guaranty Company (U.S.F.&G.) his insurer, which acknowledged receipt of the letter. Passer then contacted U.S.F.&G. and expressed an interest in settlement. U.S.F.&G. made payment on McClean's medical expenses under the medical expense coverage of its policy with Gallipeau and on August 17 offered Passer $4,500 in settlement. Passer refused the offer, demanding $45,000 from both U.S.F.&G. and Houchin's insurance carrier. Passer continued to deal with U.S.F.&G., assisting McClean in obtaining medical payments as late as November 10. He continued to refuse the $4,500 settlement offered by U.S.F.&G.

According to Passer, McClean wanted to settle her case, but she agreed that the $4,500 offer was wholly inadequate and did not complain to him about his efforts in her behalf. Passer planned to visit his children in school in the east over the Thanksgiving holiday. Before he left, he dictated a petition to be filed which McClean was to type and have ready for filing upon Passer's return.

Instead of preparing the petition, McClean wrote a letter to Passer, dated November 25, 1966, as follows:

"On June 3rd, 1966, I was involved in an automobile accident, at which time you were kind enough to help me and advise me as to what steps should be taken in regard to this matter. At that time I retained you to represent me in this matter.

"At the present time, I am rather confused about my case and feel that I must seek advice in addition to that which you have given me. I realize that you have been acting in my best interests and I do appreciate all that you have done for me in this regard. However, since I do feel that I need additional advice, this letter will serve as written notice to terminate your services as my counsel, effective this date.

"At this time and prior hereto, I have explained to you that I do not wish to file suit in this matter. I am sure that you can appreciate why I have taken the above measures.

"When I have retained the services of another attorney, you will be contacted immediately in regard to monies due you for work done to this point and arrangements will be made to take care of this matter.

"Our business association for the past year has been a pleasant one and one which I have enjoyed and appreciated.

"Thanking you for all that you have done for me, I remain,

"Very truly yours,

"(/s/) Miss Jennie McClean"

McClean then contacted Robert L. Shirkey and requested that he handle her case. Shirkey recognized the problem presented by McClean's contract with Passer. He wrote Passer that McClean was interested in employing him and discussions and correspondence between Passer and Shirkey over a division of the fee followed. McClean got in touch with Mr. Arthur Stoup, President of the Kansas City Bar Association, and sought his assistance. Stoup attempted to mediate the differences between Shirkey and Passer.

On March 9, 1967, McClean signed an agreement to employ Shirkey in the matter on a contingent fee of 50% Of the first $6,500 of recovery and one third of the balance of any recovery. Shirkey advised Passer of the arrangement and offered to divide any fee equally between them. Passer demurred and correspondence between the two continued until as late as July, 1968, without resolution of the problem.

In the meantime, in June, 1967, Shirkey filed suit on behalf of McClean in the Jackson County Circuit Court, seeking $50,000 damages against Gallipeau and Houchins. Gallipeau forwarded the petition and summons to U.S.F.&G. U.S.F.&G. had previously been in touch with Passer about his withdrawal from the case. Passer wrote U.S.F.&G. that Shirkey had become an associate in the case and would assume control of it. Memos in U.S.F.&G. files on dates of June 7 and 9, 1967, noted that Passer wanted his name on all checks or drafts.

McClean's case came to trial in April, 1970, with Shirkey handling the matter, and resulted in a verdict in favor of McClean and against Gallipeau for $27,500. On May 15, 1970, Shirkey wrote Roy A. Larson, Jr., attorney for U.S.F.&G., and told him that McClean was willing to settle her claim for the amount of coverage Gallipeau had. A copy of the letter went to Gallipeau and on June 1, 1970, he wrote Larson, requesting that the offer of settlement within his policy limits of $25,000 be accepted.

Larson forwarded the letter to U.S.F.&G., with a comment that the verdict in excess of the policy limits raised a question of how to post an appeal bond and that Gallipeau's demand increased U.S.F.&G.'s "exposure" an additional $2,500. On July 27, Larson advised U.S.F.&G. that their motion for new trial had been overruled on July 24 and that notice of appeal would have to be filed by August. Larson again noted the problem that the verdict in excess of policy limits presented with regard to the appeal bond.

A notice of appeal was filed but negotiations between Shirkey and Larson resulted in an agreement to settle McClean's claim for $23,000. On September 3, 1970, Larson wrote Shirkey, confirming the settlement agreement, but noting that a problem existed because of Passer's interest. Larson stated that, in view of Passer's lien letter received by U.S.F.&G., "any payment made to Miss McClean must protect the lien of Mr. Passer unless he releases the same in writing * * * ." Larson asked for suggestions as to how the matter should be handled.

Shirkey informed Larson that McClean was unwilling to accept any settlement which involved Passer's name appearing on the check. Shirkey and Larson worked out an arrangement whereby Shirkey would file a declaratory judgment action to determine what fee, if any, Passer was entitled to. Shirkey agreed that he and McClean would enter into a written agreement to indemnify U.S.F.&G. against any loss by reason of payment of the settlement. Shirkey requested payment by draft payable to McClean and himself. Larson, however, wanted payment by U.S.F.&G. to be made to the circuit court. A draft payable to the circuit clerk was obtained. On September 16, 1970, Shirkey and Larson met at the courthouse in Independence. A draft for $23,000, payable to the circuit clerk, was presented to the clerk who endorsed it to According to Passer, he was aware of the verdict in the case and knew that an appeal was filed but he was not informed of the settlement arrangement when it was made. He said that he met Shirkey from time to time and asked how the case was coming along and Shirkey replied "fine" but that was all that was said. On about January 10, 1971, he ran into Shirkey, asked about the case and was told that it had just been settled. Passer suggested that they go to Shirkey's office and settle the fee matter. Shirkey said he was busy and suggested Passer call the next week. Passer did so, but Shirkey put him off. Finally, after a week, Passer saw Shirkey in his office and Shirkey told him "You have nothing coming. You don't have a contract with Jennie."

Shirkey and McClean. Satisfaction of the judgment was entered and the indemnity agreement was executed by Shirkey and McClean and delivered to Larson. Shirkey deposited the check and after deducting expenses of $1,796.90, disbursed $10,601.55, one half of the balance, to McClean and placed the remaining $10,601.55 in a trust account pending determination of the fee matter.

On January 20, 1971, Passer wrote Shirkey, expressing dissatisfaction with Shirkey's failure to inform him of the settlement. He demanded $4,208.33 as his share of the fee. He made a similar demand of U.S.F.&G. Larson replied on behalf of U.S.F.&G....