Shanks v. Kilgore

• Decision Date: 01 October 1979
• Docket Number: No. 30023,30023
• Citation: 589 S.W.2d 318
• Parties: Wade SHANKS, Plaintiff-Respondent, v. Fannie P. (Shanks) KILGORE, Defendant-Appellant, and Harold L. Miller, Defendant-Respondent.
• Court: Missouri Court of Appeals

Page 318

589 S.W.2d 318

Wade SHANKS, Plaintiff-Respondent, v. Fannie P. (Shanks) KILGORE, Defendant-Appellant and Harold L. Miller, Defendant-Respondent.

No. 30023.

Missouri Court of Appeals, Western District.

Oct. 1, 1979.

Rehearing Denied Oct. 29, 1979.

Snowden & DeCuyper, Joseph Y. DeCuyper, Hsiang-Lin Lee, Kansas City, for defendant-appellant.

Sevier & Burnett, Robert F. Sevier, Roger Guy Burnett, Liberty, for shanks.

Harold L. Miller, Maysville, for defendant-respondent.

Before HIGGINS, Special Judge, Presiding, SWOFFORD, J., and WELBORN, Special Judge.

ROBERT R. WELBORN, Special Judge.

Interpleader arising out of dispute over attorney's fee. Trial court allowed fee and fee for stakeholder's attorney. Client appeals from both allowances.

Harold L. Miller represented Fannie P. Shanks, now Kilgore, in marriage dissolution proceeding with her husband, Wade Shanks, filed June 4, 1975 in the Clay County Circuit Court. A decree of dissolution was entered January 28, 1976. On the same date a property settlement agreement was entered into between the parties. It provided for the payment by Wade to Fannie of $300,000, with the first $100,000 (plus $1,380.60 child support payment) to be made within five days, the second $100,000 on February 1, 1977, and the third on February 1, 1978. The agreement provided for the payment by Wade of $4,279.20 to Fannie "as and for all attorneys fees due to her for the dissolution of the marriage, by check payable to the Wife and Harold L. Miller, her attorney."

According to Miller, on the morning of January 28, 1976, he explained the property settlement agreement to Fannie before it was executed by her. He told her that the court "might" allow an attorney fee to be paid by Wade, " * * * but that would only be for the dissolution action, and that her fee the fee for the enforcing and obtaining of her property rights would be her separate expenses and would not be paid, in any event, by her husband." He told Fannie that his fee for his services in that regard would be $60,000, to be paid by paying him twenty per cent of each of the installments when, as, and if they were paid to her. According to Miller, Fannie agreed to this arrangement. By letter, addressed to Wade and his attorneys and signed by Fannie and Miller, dated January 27, 1976, the request was made that all payments due Fannie under the settlement agreement be made to Fannie and Miller, " * * * her attorney."

The first $100,000 was paid as per the settlement and Miller received $20,000 as his fee from the payment.

On June 25, 1976, Fannie, then residing in Broomfield, Colorado, addressed a letter to Miller: "This letter is to inform you I do not have any intentions of paying any more attorney's fees to you."

By letter dated July 6, Miller responded, stating, " * * * (W)e had an express agreement and understanding that our fee would be based upon 20% Of the amount, received by you in the settlement. * * * (W)e will expect you to pay the remainder of the fee due to us, which is $40,000.00."

On September 21, 1976, Fannie addressed a letter to Wade and his attorneys, advising them that the previous authorization to make payments due under the property settlement to Fannie and Miller was revoked and that all payments should be made directly to Fannie.

On October 1, 1976, Miller wrote Wade and his attorneys:

"You are hereby advised and notified that pursuant to Section 484.130 and 484.140 of V.A.M.S., and pursuant to my agreement with Fannie Pearl Shanks, I have an attorney's lien upon the balance of the proceeds of the property settlement agreement by and between Wade Shanks and Fannie Pearl Shanks, in Case No. 48118, Division 3 in the Circuit Court of Clay County, Missouri, which property settlement agreement is dated January 28, 1976, and which attorney's lien attaches to and shall be paid when payments are made of the balance due upon that agreement under Section 1c and d of Schedule A, the first of which such payments shall be due and payable February 1, 1977 and the second of which shall be due and payable February 1, 1978, and each in the sum of $100,000.00, and further that said attorney's lien is 20% Of those amounts due and payable."

On November 15, 1976, Wade filed his interpleader petition in the DeKalb County Circuit Court, admitting the indebtedness to Fannie under the settlement and setting forth the direction of Fannie to make future payment to her alone and Miller's notice of his claim of an attorney's lien. The petition sought direction for the portion that Fannie and Miller were entitled to receive of the payment due February 1, 1977 and February 1, 1978. Under an amended interpleader petition, Wade paid the amount of the 1977 and 1978 payments, less credits not here significant, into the registry of the court.

Miller answered, asserting an attorney's lien equal to 20% Of the principal amounts owed by Wade. Fannie (by then Fannie Kilgore) answered, denying Miller's claim, and asserting that she did not know or understand the nature or extent of the alleged oral contingent fee contract relied upon by Miller, and that if she agreed to such a contract, "she did so * * * while under strong medication for physical injuries and that such agreement is void and unenforceable and is against and violates public policy." Fannie cross-claimed against Miller for the $20,000 he had received, but the cross-claim was later dismissed.

At the hearing of the case, Miller testified to his arrangement with Fannie for his fee. Fannie denied any such arrangement. She testified that she was taking medication at the time of the property settlement and disclaimed any recollection for the events surrounding its execution. She did say that Miller never told her that she owed him a fee, saying that Miller told her that he'd collect his fee from Wade.

The trial court rejected Fannie's testimony and found the facts as testified to by Miller. The trial court allowed Wade $1,613.75 for his attorney's fees in the interpleader, Miller $40,000, and ordered the balance paid to Fannie or for her account with others.

In this court, appellant, insofar as her appeal against Miller is concerned, relies upon the rule that a contract between an attorney and a client in a divorce proceeding calling for a contingent fee based upon a percentage of alimony or property settlement received in such proceeding is contrary to public policy and void. 7 Am.Jur.2d Attorneys at Law, § 217 (1963); 17 C.J.S. Contracts § 235 (1963). Appellant cites no Missouri authority where this rule has been applied. The Code of Professional Responsibility states: "Because of the human relationships involved and the unique character of the proceedings, contingent fee arrangements in domestic relation cases are rarely justified." Rule 4, Canon 2, EC 2-20.

The trial court in this case concluded that the fee arrangement between Miller and Fannie was not a contingent fee contract " * * * as that term is known and commonly used in the practice of law in Missouri." The trial court further found:

"18. It was not until after the Defendant, Kilgore had agreed to settle upon those terms that she was advised by the Defendant, Miller of the amount of her attorney's fees in such litigation and such advice was that she was to pay to the Defendant, Miller, as and for such fees, 20% Of the payments made upon the sum of $300,000.00 'as, when and if payments were made thereupon to her by the Plaintiff.'

"19. One of the circumstances relied upon...