Recht v. Urban Redevelopment Authority of City of Clairton

• Decision Date: 17 January 1961
• Parties: Herman H. RECHT, Appellant, v. URBAN REDEVELOPMENT AUTHORITY OF the CITY OF CLAIRTON.
• Court: Pennsylvania Supreme Court

Page 134

168 A.2d 134

402 Pa. 599

Herman H. RECHT, Appellant, v. URBAN REDEVELOPMENT AUTHORITY OF the CITY OF CLAIRTON.

Supreme Court of Pennsylvania.

Jan. 17, 1961.

Rehearing Denied March 10, 1961.

Joseph I. Lewis, Pittsburgh, for appellant.

William M. Acker, John B. Nicklas, Jr., McCrady & Nicklas, Pittsburgh, for appellee.

Before CHARLES ALVIN JONES, C.J., and BELL, MUSMANNO, BENJAMIN R. JONES, COHEN, BOK and EAGEN, JJ.

BENJAMIN R. JONES, Justice.

This is an appeal from a decision of the Superior Court (191 Pa.Super. 404, 156 A.2d 877) which affirmed a judgment entered by the Court of Common Pleas of Allegheny County in the amount of $750 with interest and costs in favor of J. B. Nicklas, Jr., an attorney, and against Herman Recht, a judgment which the court directed be a 'charging lien' against a jury verdict recovered by Recht against the Urban Redevelopment Authority of the City of Clairton [Authority].

The issue herein presented is: may an attorney assert a 'charging lien' against a judgment recovered as a jury verdict in an appeal from a viewers' award in a condemnation proceeding if the attorney took no part in the preparation or trial of the appeal proceeding?

Recht owned an undividen one-sixth interest in certain real estate in the city of Clairton. This realty was condemned by the Authority of that city in eminent domain proceedings in the Court of Common Pleas of Allegheny County, No. 312 April Term, 1954. ¹ A board of viewers was appointed and proceedings were held before the viewers which resulted in an award of $22,500, of which $3,750 represented Recht's share. Attorney Nicklas took part in that proceeding, filed and argued exceptions to the viewers' award and he further prepared and filed a petition for appeal to the Court of Common Pleas of Allegheny County on behalf of all the tenants in common [No. 1057 January Term, 1955]. However, all of the parties, with the exception of Recht finally accepted the viewers' award rather than proceed with a jury trial.

Attorney Nicklas then submitted a bill of $750 to Recht for his services rendered in the viewers' proceeding [No. 321 April Term]. Recht denied that Attorney Nicklas represented his interests in that proceeding or that he was ever retained to do so, and, accordingly, refused to pay the bill.

Subsequently, a separate appeal to the Court of Common Pleas of Allegheny County was filed on behalf of Recht [No. 816 January Term, 1955] by Louis Rosenfield, Esq. ² After a trial, Recht recovered a verdict of $6,360 against the Authority upon which a judgment was duly entered. Attorney Nicklas did not participate in that proceeding.

Thereafter, Attorney Nicklas presented a petition praying for a charging lien against the verdict and judgment thereon awarded to Recht. The court, acting in the capacity of a chancellor, granted a rule on Recht and the Authority to show cause why the sum of $750 [fee for services] should not be paid out of the $6,360 judgment. The Authority answered, alleging that it was a stakeholder of the fund and that it was ready or prepared to pay as the court ordered. By order of court, the Authority was permitted to the pay the amount of the judgment to Recht upon the filing of a bond to insure and protect the claim of Attorney Nicklas. Herman Recht presented a motion to dismiss the rule, which was argued before the court en banc. The court refused the motion and ordered Recht to answer the rule. Recht then answered the rule denying that the relationship of attorney and client ever existed between the parties in the viewers' proceeding and denying the right of Attorney Nicklas to any lien. Recht later submitted a petition for leave to amend his answer for the purpose of requesting a jury trial; a rule to show cause was granted, and, after oral argument and briefs, the court en banc dismissed the petition. ³ A hearing was held before the court and on the pleadings and the testimony taken, the court found as a fact that Recht had retained Attorney Nicklas as counsel to represent him in the viewers' proceeding and that the sum of $750 was fair and reasonable. The court entered a judgment in favor of Attorney Nicklas and against Recht and directed that such judgment be a charging lien against the fund of $6,360.

Upon Attorney Nicklas' petition for a rule, the court below first adjudicated Nicklas' claim for fees against Recht and then proceeded to make the judgment thus obtained a charging lien on the fund realized in the condemnation proceeding. In both instances, the court below erred. The court below had no jurisdiction in this form of proceeding to pass upon and adjudicate Nicklas' claim for fees and the court could not in the capacity of a chancellor assume such jurisdiction. Furthermore, assuming, arguendo, the court had jurisdiction to pass upon the validity of Nicklas' claim for fees, under the instant circumstances, it could not make the judgment a charging lien on this fund.

The right of an attorney to secure an equitable charging lien upon a fund has been frequently recognized by the appellate courts of the Commonwealth. McKelvy's and Sterrett's Appeals, 108 Pa. 615, is a landmark decision on the subject. In that case, a controversy had arisen out of an award made to Sterrett and others by a master's court. Sterrett's attorney, Neill, moved to have his fee paid out of the share of his client, Sterrett. An auditor was appointed and he found that Neill was entitled to his fee. This Court, affirming the decree entered below, stated that counsel had no lien upon the fund but, since its existence was due to counsel's efforts and since it had been agreed that compensation was to be from the fund recovered, counsel was and would be treated as the 'equitable owner' to the extent of his fees. It further appeared that Sterrett, the client, was insolvent.

In Appeal of Atkinson, 8 Sadler 292, 11 A. 239 an attorney had secured a judgment for his corporate client and the money realized by execution on the judgment was paid into court and an auditor appointed to distribute the proceeds. Upon the request of the attorney for allowance of his fees from the fund, we affirmed, per curiam, the decree of the court below which held that where a fund is brought into court through the efforts of an attorney, the court may award him reasonable compensation out of the fund, especially where the client is insolvent.

In Aber's Petition, 1901, 18 Pa.Super. 110, Aber obtained a judgment against Schnuth for $188.42. Shortly thereafter, Schnuth obtained a judgment against Aber for $327.28. The day before entry of the latter judgment, Schnuth assigned it to his attorneys for services rendered in that and other proceedings. Aber was granted a rule upon Schnuth and his attorneys to show cause why he should not be allowed to set off his judgment. Schnuth was insolvent at the time. The attorneys claiming a lien upon the judgment, the court discharged the rule. While this Court reversed on other grounds, it was stated that, even assuming that a lien was available upon the fund, such lien was limited to claims for services rendered in the proceeding which created the fund and did not extend to services rendered in other litigation.

In Seybert v. Salem Township, 22 Pa.Super. 459, counsel was retained by the plaintiff and he prepared a case for trial. Other counsel however prosecuted the case to judgment and received the payment therefor. The first counsel then petitioned for a rule to show cause why he should not be paid out of the funds in the hands of the attorneys. The court found that there was no fund created by the services of the attorney nor was there any agreement between counsel and his former client for the payment of services, and, therefore, no basis for the imposition of a lien upon such funds. The Court stated that the relationship of the parties under these circumstances was that of creditor and debtor and that counsel was required to pursue his remedy in the ordinary fashion for collecting debts, namely, in an assumpsit action.

In Quakertown & Eastern Railroad Co. v. Guarantors' Liability Indemnity Co., 206 Pa. 350, 55 A. 1033, an attorney was retained to secure certain bonds wrongfully detained by the defendants. The attorney filed suit in equity and this suit was finally settled. Not being satisfied with the amount of compensation offered him, the attorney refused to mark the case settled of record. The defendants petitioned for leave to deposit the bonds with the prothonotary and asked for an order on the attorney to interplead. The court held that there was no fund created by counsel nor any agreement to look to that fund for compensation and, therefore, no reason for the court to interfere in any extraordinary manner for counsel's protection.

In the leading case, Harris' Appeal, 323 Pa. 124, 186 A. 92, Mrs. Harris retained counsel, a Mr. Jacoby, to represent her in certain condemnation proceedings instituted by the city. It was agreed in writing that counsel fees were to be 10% of the amount, if any, collected from the city. A bank held a mortgage on the condemned property as security for a debt due them by Mrs. Harris. Jacoby represented Mrs. Harris in the viewers' proceedings and an award was made which was less than the amount of the mortgage. After the award became final but before payment by the city, the...