Plaza Shoe Store, Inc. v. Hermel, Inc.
| Decision Date | 06 July 1982 |
| Docket Number | No. 62623,62623 |
| Court | Missouri Supreme Court |
| Parties | The PLAZA SHOE STORE, INC., et al., Appellants, v. HERMEL, INC., et al., Defendants, Greene, Cassity, Carnahan, Freemont & Greene, Movants-Respondents. |
Glenn McCann, Kansas City, for appellants.
Andrew Bennett, Bruce E. Himmelreich, Springfield, for movants-respondents.
The appellants, Plaza Shoe Store, et al., brought the underlying suit against Hermel, Inc., apparently for alleged negligence in the design and construction of a building which appellants leased. This action was eventually settled with appellants receiving approximately $58,000, which was placed in escrow by the court. Greene, Cassity, Carnahan, Freemont & Greene, respondents, had been employed originally by appellants under a contingent fee contract to handle the action against Hermel, Inc., but they had been discharged prior to any judgment or settlement. Respondents filed their Notice of Attorneys' Lien, and then moved the court to distribute a certain amount of the funds in connection therewith. The case at bar involves the trial, held without a jury, on the attorneys' lien issue.
The facts necessary for resolution of this case were ably set out in a detailed "findings of fact" by the Hon. J. Powell. The findings, without benefit of quotation marks, are:
1. Plaintiffs and movants entered into a contingent fee contract whereby plaintiffs were to pay movants one-third (1/3) of any and all amounts received by way of settlement in the above-captioned law suit, plus all out-of-pocket expenses.
2. At the time movants received this case, it had minimal settlement value for the following reasons:
a. The named plaintiff was neither the occupant nor the tenant of the premise and had sustained no damages.
b. The Statute of Limitations was about to lapse as to the Plaza Mall, Inc., the proper party of this action, and defendant was aware the wrong party was named as plaintiff.
c. Plaintiff had withheld rents without placing same into escrow, and a Motion for Summary Judgment was pending wherein defendants allege breach of the lease and sought termination of same.
d. The lease in question specifically prohibited recovery for damaged merchandise due to negligence on the part of defendant Hermel, Inc.
e. No offers of settlement or compromise had been made prior to movants' entry into this case.
3. The time expended and charges assessed by the various attorneys for movants in this case were as follows:
Time In Office Out Office
(Hours) Charges Charges
Attorney Per Hour Per Hour
--------------------- ----------------- --------- ----------
Douglas W. Greene 115-3/4 $50.00 $60.00
(per stipulation)
J. Douglas Cassity 40 40.00 50.00
James P. Ferguson 158-3/4 40.00 40.00
Robert W. Freeman 2 40.00 40.00
Douglas W. Greene III 10-3/4 40.00 40.00
John M. Carnaham III 1/4 40.00 40.00
William D. Shepard 6 40.00 40.00
4. This case was a very complex case involving numerous issues, and expenditures of time and charges as set out above were reasonable.
5. Movants provided excellent representation to plaintiffs and obtained good results in the following respects:
a. Movants took a three-year-old case with no settlement offers and a total prayer for damages of $43,441.40 and obtained an offer of settlement of $50,000.00 cash, plus the possibility of a reduction of rent for the remaining fifteen years on plaintiffs' lease with defendant.
b. Movants amended the original petition to add the proper plaintiffs who actually suffered the damages set out in the original petition c. Movants conducted extensive discovery which disclosed knowledge on the part of the architect and builder of the Battlefield Mall that a dangerous condition existed, but that said architect and builder failed to take steps to correct same.
d. Movants added as defendants the architect and builder of said Battlefield Mall and obtained contributions from them to the final settlement in this case.
6. Movants received and conveyed to plaintiffs offers of $25,000.00, $32,500.00, and $47,500.00, but in each instance advised plaintiffs to refuse same.
7. Movants received an offer of settlement from defendants for a $50,000.00 cash payment plus a possibility of a reduction of rent in the remaining fifteen years on plaintiffs' lease with defendant Hermel, Inc.
8. Movants relayed that offer of $50,000.00 cash plus a possibility of a reduction of rent payments to plaintiffs and recommended the same be accepted.
9. Plaintiffs, upon being advised of said offer, accused movants of being crooks and selling them out to defendants. Said allegations by plaintiffs were unfounded and without merit.
10. Upon being accused by plaintiffs of being crooks and selling plaintiffs out to defendants, movants could no longer adequately represent plaintiffs and terminated their employment contract with plaintiffs.
11. Movants duly filed notice of attorneys' lien and subsequently entered into a stipulation with plaintiffs agreeing movants would release all papers to plaintiffs and no waiver of attorneys' lien would be construed or raised by plaintiffs.
12. On October 22, 1976, movants submitted a bill to plaintiffs seeking a fee of $16,470.00, plus costs. The Memorandum of Agreement, which is movants' Exhibit 13, and the lien filed in this cause, was based upon a fee of $16,470.00, plus costs. Said amount does not represent one-third of $50,000.00, and movants now seek $16,666.66, plus out-of-pocket expense. The court finds that movants are committed to the original amount claimed as a fee, i.e., $16,470.00.
13. The court finds that movants charged plaintiffs for costs and expenses in the amount of $1,258.07. The court further finds that movants did not credit plaintiffs with two payments of $116.55 as shown by plaintiff's evidence. The court further finds that one of the out-of-pocket expenses is investigator fees totaling $252.12. Movants were unable to produce the name of such investigator, nor did they produce any time slips of such investigator. The court concludes that such expense is not supported by the evidence.
14. The court finds that movants are entitled to a fee of $16,470.00, plus out-of-pocket expense of $772.85, or a total of $17,242.85.
15. In the event it shall be determined that this court erred in upholding the contingency fee contract, the court finds from the evidence that the reasonable value of the services rendered by the attorneys is: Ferguson, $6,390.00; Greene, $5,787.50; Cassity, $1,600.00; Others, $640.00; or $14,417.50.
All hours other than the hours of attorney Greene have been computed at $40.00 per hour. Attorney Greene's 1153/4 hours has been figured at $50.00 per hour. Therefore, a judgment based upon reasonable value of services rendered would be $15,190.35, which includes the out-of-pocket expenses heretofore found to be proper.
This case comes before us upon transfer from the Court of Appeals, Southern District, with an opportunity to consider again the proper recovery to be made available to an attorney discharged without cause by a client after legal services have been rendered pursuant to a contingent fee contract but before judgment or settlement has been reached. Prior decisions in this state have held that an attorney may treat the contract as rescinded and sue for the reasonable value of services rendered until the time of discharge; or, at his or her option treat the cause of action as liquidated by reduction to judgment (or settlement) and proceed upon the contingent fee contract. Barthels v. Garrels, 206 Mo.App. 199, 227 S.W. 910 (1920); Mills v. Metropolitan St. Ry. Co., 282 Mo. 118, 221 S.W. 1 (1920); In re Thomasson's Estate, 346 Mo. 911, 144 S.W.2d 79 (Mo.1940); In re Downs, 363 S.W.2d 679 (Mo.1963); and Craig v. Jo B. Gardner, Inc., 586 S.W.2d 316 (Mo. banc 1979). Appellants invite this court to review the above holdings, taking into account the modern trend toward limiting the discharged attorney's recovery to the reasonable value of services rendered up to the time of discharge.
Before examining the "limitation of recovery" question, we first attend to appellants' first point of error, i.e., that the trial court lacked jurisdiction over the pending case because movants-respondents (the attorneys) proceeded by motion in the original case, instead of by an independent action against the former clients. Appellants assert that the only manner by which an attorney may enforce his lien, when discharged prior to judgment or settlement, is by an independent proceeding.
While Missouri's version of the attorney lien statute does not provide a remedy to enforce the lien, "the courts will not suffer it to perish from such failure." Nelson v. Massman Const. Co., 120 S.W.2d 77, 87 (Mo.App.1938), modified on other grounds, sub nom., State ex rel. Massman Const. Co. v. Shain, 344 Mo. 1103, 130 S.W.2d 491 (1939) (citing Curtis v. Metropolitan Street R. Co., 118 Mo.App. 341, 94 S.W. 762 (1906)). In Nelson, attorneys filed motions to set aside the satisfaction of a judgment in favor of plaintiff against defendant and to obtain judgments in their favor for attorneys' fees or services rendered the plaintiff. In the case at bar, the attorneys proceeded by a Motion for Distribution of Funds held in Escrow, said funds having been placed there by defendants. From an inspection of Lawson v. Missouri & Kansas Telephone Co., 178 Mo.App. 124, 164 S.W. 138 (1914), it appears that the defendants heeded the advice of this Court and placed the funds to satisfy the plaintiff's claim in custodia legis pending resolution of the...
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