Skelton v. Spencer
| Decision Date | 10 February 1981 |
| Docket Number | No. 12969,12969 |
| Citation | 625 P.2d 1072,102 Idaho 69 |
| Parties | , 23 A.L.R.4th 315 Floyd E. SKELTON and Idaho Livestock Commission Company, an Idaho corporation, Plaintiffs, v. Louise SPENCER and Miriam Spencer, Defendants-Appellants, Leland Spencer, Carmen Spencer Jensen, Alexa Spencer Elkington, and Janet Spencer, and Idaho First National Bank, Executor of the Estate of S. R. Spencer, Deceased, Defendants, Rigby, Thatcher & Andrus, P. A., Claimants-Respondents. |
| Court | Idaho Supreme Court |
Lloyd J. Webb of Webb, Burton, Carlson, Pedersen & Paine, Twin Falls, for defendants-appellants.
Gordon S. Thatcher and G. Rich Andrus of Rigby, Thatcher & Andrus, P. A., Rexburg, for claimants-respondents.
This appeal involves the attempted assertion and enforcement of an attorney's charging lien. Holding that the assertion of the claims involved here in the manner selected was proper, we affirm.
The appellant's husband, S. R. Spencer, died in 1960. At that time, he was one of the partners in the Skelton-Spencer Trading Company, a partnership which held all the capital stock of the Idaho Livestock Auction Company, an Idaho corporation. The Trading Company was involved in the purchase and sale of livestock. The Auction Company was engaged in an auction sale business on real property owned by and leased from the Idaho Livestock Commission Company. Spencer in his lifetime owned 241/2% (1271/2 shares) of the stock of the Commission Company.
Upon Spencer's death, the Idaho First National Bank was appointed executor pursuant to his will. The bank then sold Spencer's partnership interest in the Trading Company (and thus the Auction Company) to the surviving partners, M. R. Skelton and Floyd Skelton. The probate court (case no. 4193, Seventh District Magistrate Division, Bonneville County) confirmed the sale. The appellant, Mrs. Spencer, initiated an action (no. 13674, Seventh District, Bonneville County) against the bank and the Skeltons in 1964 alleging her husband's interest in the Trading/Auction Companies had been sold at an undervalued figure. The district court dismissed that action for failure to obtain jurisdiction over an indispensable party, a ruling this court reversed, remanding the case for further proceedings. Spencer v. Spencer, 91 Idaho 880, 434 P.2d 98 (1967).
Thereafter, in 1970, Mrs. Spencer discharged her attorneys and approached the firm of Rigby & Thatcher (now Rigby, Thatcher & Andrus) with a request for representation in a number of related legal areas. She had many concerns which included not only the above mentioned sale, but also the performance of the executor of her deceased husband's estate, the validity of certain disclaimers entered into by her children, the extent of the partnership and corporate interests held by her husband and the efforts necessary to realize upon them, and other matters.
Rigby & Thatcher agreed to take on the myriad legal concerns of Mrs. Spencer in regard to the estate. An agreement was later made through correspondence which set the parameters of the representation. Mr. Thatcher wrote on March 6, 1973:
"Dear Louise:
To avoid any misunderstanding, I believe we should have an agreement as to our compensation in these various matters:
1. Removal of Executor and Approval of Disclaimer of Heirs. $7,500.00 and if an appeal is taken to the Supreme Court an additional $2500.00. This is regardless of outcome.
2. Pending law suit against Idaho First National Bank, et al. $5,000.00 if resolved at trial stage and an additional $2500.00 if involving an appeal to the Supreme Court, regardless of outcome. Plus an additional fee, contingent on outcome, of 15% of all sums recovered. 3. Potential suit against Idaho Livestock Commission Company. If settled without suit (such as a package settlement of all claims) then 15% of all sums recovered. If a suit is required, then $5,000.00 if resolved at trial stage and an additional $2500.00 if involving an appeal to the Supreme Court, regardless of outcome, plus an additional fee contingent on recovery, of 15% of all sums recovered.
Please write me of your acceptance of this arrangement. If there are any questions on it please call or write.
All of this will be plus actual costs disbursed.
This has already required a tremendous expense and effort on our part with much more required in the future.
It appears you will want a court determination on all of these matters.
Three days later Mrs. Spencer replied that "the proposed fees are entirely reasonable and acceptable to me." This agreed upon representation clearly contemplated the recovery of a sizable sum for Mrs. Spencer from the related endeavors, and provided for the payment of compensation to the firm depending upon the contingencies encountered in achieving this recovery.
As noted in the letter, Rigby & Thatcher were to institute proceedings for the removal of the bank as executor of the estate and to secure approval of the previously filed disclaimers of the Spencer children. Prior to the sending of the March 6 letter, Rigby & Thatcher had so petitioned the probate court in case no. 4193. These matters were awaiting decision when the present litigation concerning the attorney's lien arose.
The firm was also requested to proceed with the pending action, no. 13674, concerning the allegedly undervalued sale of the partnership interest. After remand by this court, Spencer v. Spencer, 91 Idaho 880, 434 P.2d 98 (1967), no action was taken for some time. The case was ultimately set for trial on May 1, 1973.
The other action contemplated was a potential suit against the Commission Company in the nature of a shareholder's action to obtain a recovery for Mrs. Spencer for rents owed to the Commission Company by the Auction Company and for allegedly unpaid dividends on the stock owned by her husband. It was apparently understood that Rigby & Thatcher would try to compel the bank to seek this recovery before actually filing their own suit; an alternative prayer for relief in the petition for the removal of the bank as executor in case no. 4193 so requested.
The claims of the plaintiffs (Mrs. Spencer and the children) in no. 13674 were settled on May 2, 1973 as to all parties save the bank, against whom the right of further action was reserved. This settlement also resolved the rent and dividend claims against the Commission Company noted above.
Two agreements were entered into in regard to this settlement. Mrs. Spencer entered into a covenant not to sue the Commission Company in consideration of $150,000 with $25,000 being paid upon execution and the remainder due upon Mrs. Spencer obtaining the ratification of the children. Mrs. Spencer relinquished her Commission Company stock by way of this agreement. She also signed a covenant not to proceed further and not to execute in case no. 13674, releasing those claims (save any against the bank) for $37,500. $5,000.00 of this amount was immediately paid. Thus a total of $187,500 was paid or obligated in settlement of Mrs. Spencer's various claims concerning the estate of her husband.
Subsequently, in July 1973, Mrs. Spencer became dissatisfied with her legal representation and discharged Rigby & Thatcher as her attorneys. She concomitantly refused to perform the settlement agreements. The other parties to the agreements (Skelton and the Commission Company) then commenced an action (no. 20500, Seventh District, Bonneville County) against Mrs. Spencer, her children, and the bank as executor seeking specific performance. This action also desired to determine all claims of the defendants against the settlement amounts. During the course of this litigation, Rigby & Thatcher filed notice of claim of attorney's lien in case no. 20500, case no. 13674, and the probate case no. 4193. Following a trial to the court in case no. 20500, judgment was rendered granting specific performance of the settlement agreements. Mrs. Spencer appealed to this court and in Skelton v. Spencer, 98 Idaho 417, 565 P.2d 1374 (1977), cert. den. 434 U.S. 1014, 98 S.Ct. 730, 54 L.Ed.2d 758 (1978), that decision of the district court was affirmed. The plaintiffs in case no. 20500 then deposited with the district court the remaining unpaid balance ($157,500) due under the settlement agreements.
Rigby & Thatcher thereafter filed a petition in no. 20500 to enforce the lien against the fund. They sought an order directing payment of claimed fees and an order to show cause directing Mrs. Spencer to appear and show why the claimed lien should not be enforced. The court issued an order directing the clerk to pay the attorneys but allowing Mrs. Spencer a time in which to respond.
Mrs. Spencer, now represented by other counsel, answered by way of a motion to strike the order and an affidavit of Mrs. Spencer in opposition to the lien and claimed fees. She also raised objections to venue and asserted a right to a jury trial on the question of the lien. Argument was had and the court denied the motion to strike. Mrs. Spencer's attorney then filed a "response" to the claimed lien in which improper venue and the right to a jury trial were again asserted, and dismissal of the claim sought. Mrs. Spencer also alleged that any such lien claim must be brought in an independent law suit. The matter of the asserted lien was set for hearing on the pending order to show cause in October of 1977, but was continued to December 14, 1977, upon the stipulation of the parties. Subsequent to the hearing, at which all parties were heard on the merits of the lien issue as well as the raised objections, the district court entered an order on March 24, 1978, granting attorney fees. The court noted that Mrs. Spencer had appeared and contested the relief sought by the attorneys, reasserting those contentions mentioned above. The court found that Mrs. Spencer and Gordon Thatcher entered into an agreement whereby the firm...
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