Starks v. Browning

• Decision Date: 03 August 1999
• Docket Number: 98-00038
• Citation: 20 S.W.3d 645
• Parties: STELLA L. STARKS, Plaintiff/Appellant, VS. SAMUEL J. BROWNING, JOSEPH F. BROWNING, and MARY BROWNING, Defendants, BART DURHAM INJURY AND ACCIDENT LAW OFFICES, Appellee. AppealIN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE Filed
• Court: Tennessee Court of Appeals

STELLA L. STARKS, Plaintiff/Appellant VS SAMUEL J. BROWNING, JOSEPH F. BROWNING, and MARY BROWNING, Defendants BART DURHAM INJURY AND ACCIDENT LAW OFFICES, Appellee

Appeal No. 01A01-9801-CV-00038

IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE

Filed August 3, 1999

APPEAL FROM THE CIRCUIT COURT FOR ROBERTSON COUNTY AT SPRINGFIELD, TENNESSEE

Robertson Circuit No. 7342

THE HONORABLE JOHN H. GASAWAY, III, JUDGE

This appeal involves a law firm's efforts to enforce a statutory attorney's lien on the proceeds of a post-verdict personal injury settlement. After the law firm withdrew from representing the plaintiff because of a dispute arising from the settlement, the Circuit Court for Robertson County, the court where the underlying personal injury action had been tried, granted the law firm's motion for a lien on the settlement proceeds for its fee and costs advanced on the plaintiff's behalf. Thereafter, the trial court granted the law firm's motion to execute on the lien and directed the plaintiff to pay her former law firm $51,091.99. On this appeal, the plaintiff asserts that the trial court erred by directing her to pay her former law firm because the lien was not properly perfected and because the procedure followed by the trial court did not permit her to assert her available claims and defenses against her former law firm. While we have determined that the law firm properly perfected its lien, we find that the trial court did not have the authority to adjudicate the fee dispute between the law firm and its former client. Accordingly, we reverse the portion of the trial court's order granting the motion for execution of the attorney's lien.

For Stella L. Starks:

Steve R. Darnell, Bateman, Bateman & Darnell, Clarksville, Tennessee

For Bart Durham Injury & Accident Law Offices:

Robert L. Whitaker, Nashville, Tennessee

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED

WILLIAM C. KOCH, JR., JUDGE

OPINION

I.

On October 8, 1994, Stella Starks was waiting to make a left turn at the intersection of Memorial Boulevard and Pawnee Drive in Springfield when she was struck head-on by a pick-up truck driven by Samuel Browning. Mr. Browning, a minor, was intoxicated at the time because he had consumed four or five beers at a cookout at Tim Farmer's home. Ms. Starks retained the Bart Durham Injury and Accident Law Offices ("Bart Durham Law Offices") to represent her on the basis of a one-third contingency fee plus reimbursement of expenses. In April 1995, the Bart Durham Law Offices filed suit in the Circuit Court for Robertson County against both Mr. Browning and his parents who were registered co-owners of Mr. Browning's pick-up truck. Later, in February 1996, the Bart Durham Law Offices filed an amended complaint naming Tim Farmer and his parents as additional defendants.

In January 1997, the trial court granted Mr. Farmer's and his parents' motion for summary judgment and dismissed them from the case.¹ In August 1997, following a three-day trial, a jury returned a verdict against Mr. Browning alone for $281,000 in compensatory damages and for $500 in punitive damages. On the same day the jury returned its verdict, Ms. Starks authorized the Bart Durham Law Offices to accept a post-verdict settlement offer of $110,000.² Twenty minutes later she attempted to withdraw her acceptance; however, the Bart Durham Law Offices had already communicated her acceptance to opposing counsel. Thus, Ms. Starks' lawyer told her that her earlier acceptance had made the settlement a "done deal." Nevertheless, on the day following the verdict, Ms. Browning talked with Bart Durham personally by telephone and rescinded her acceptance of the offer and retracted the firm's authority to settle the suit on her behalf.

On September 4, 1997, the trial court entered a judgment order embodying the jury's verdict against Mr. Browning. On the same day, the Bart Durham Law Offices moved to withdraw as counsel for Ms. Starks and to assert a statutory attorney's lien on the settlement proceeds. It also filed a "motion" seeking a declaratory judgment concerning the validity of the settlement agreement. These motions were heard on the same day they were filed.³ Thereafter, on October 7, 1997, the trial court entered an order permitting the Bart Durham Law Offices to withdraw as Ms. Starks' counsel and declaring that the Bart Durham Law Offices had a $51,091.99 lien "on any recovery, whether by settlement, verdict, levy, garnishment, execution or otherwise, that Plaintiff receives in this matter or any other action predicated on the same cause."

Ms. Starks retained a new lawyer following the September 4, 1997 hearing. The new lawyer informed the Bart Durham Law Offices that he believed that its representation of Ms. Starks fell below the standard of care reasonably expected of competent attorneys.⁴ He also informed the Bart Durham Law Offices that he was holding $114,157.75 in settlement checks and suggested that an amount equal to the amount being claimed by the Bart Durham Law Offices be held in escrow pending the resolution of the malpractice claims. Thereafter, on November 13, 1997, Ms. Starks filed a malpractice action in the Circuit Court for Robertson County against the Bart Durham Law Offices and the individual lawyer who had represented her at trial.⁵

On November 17, 1997, the Bart Durham Law Offices filed a "motion" seeking "execution" of the October 7, 1997 order. One week later, Ms. Starks requested the trial court to find that its October 7, 1997 order was "ineffective." Following a hearing, the trial court entered two orders on December 18, 1997. The first order denied Ms. Starks' motion to set aside its October 7, 1997 order, and the second order granted the Bart Durham Law Offices' motion for execution of the October 7, 1997 order. The second order also stated, in part, that "the amount of Fifty-One Thousand Ninety-One and 99/100 Dollars ($51,091.99) which represents Bart Durham Injury & Accident Law Offices court approved fees and expenses be deposited with the Clerk of the Court by Steve Darnell, Esquire forthwith."

Ms. Starks has appealed from the order directing her to pay the Bart Durham Law Offices $51,091.99. After filing its brief with this court, the Bart Durham Law Offices filed a motion pursuant to Tenn. R. App. P. 19(b) and (e) to be added as an appellee in this case since it was a real party in interest with regard to the disputed $51,091.99. This court granted the motion on September 16, 1998.

II.

Ms. Starks asserts that there are two reasons the order directing her to pay the Bart Durham Law Offices $51.091.99 cannot stand. First, she insists that the October 7, 1997 order could not have created a valid attorney's lien for the Bart Durham Law Offices because the lien is not noted in the September 4, 1997 judgment against Mr. Browning. Second, she argues that the trial court should not have proceeded to adjudicate the Bart Durham Law Offices' right to recover a fee from her.

A.

The relationship between a client and an attorney is essentially contractual. See Alexander v. Inman, 974 S.W.2d 689, 694 (Tenn. 1998); In re Ellis, 822 S.W.2d 602, 607 (Tenn. Ct. App. 1991). In its most basic terms, this contract involves the exchange of competent legal services in return for an agreement to pay a reasonable fee. The attorney is obligated to exercise the utmost good faith in the discharge of his or her duties to represent the client. See Crawford v. Logan, 656 S.W.2d 360, 364 (Tenn. 1983); Fitch v. Midland Bank & Trust Co., 737 S.W.2d 785, 789 (Tenn. Ct. App. 1987). If the attorney discharges his or her duties appropriately, he or she is entitled to the reasonable, agreed-upon compensation without regard to the actual benefit the services might have been to the client. See Spofford v. Rose, 145 Tenn. 583, 611, 237 S.W. 68, 76 (1922); Bills v. Polk, 72 Tenn. 494, 496 (1880); Adams v. Mellen, 618 S.W.2d 485, 488 (Tenn. Ct. App. 1981).

The courts may decline to enforce an attorney's fee contract only (1) when the attorney did not negotiate the contract in good faith, see Alexander v. Inman, 974 S.W.2d at 693-94, (2) when the contract provides for an unreasonable fee, see White v. McBride, 937 S.W.2d 796, 800-01 (Tenn. 1996), or (3) when the attorney has otherwise breached his or her fiduciary obligations to the client and this breach has prejudiced the client's interests. See Crawford v. Logan, 656 S.W.2d at 365; Alexander v. Inman, 903 S.W.2d 686, 694 (Tenn. Ct. App. 1995); Coleman v. Moody, 52 Tenn. App. 138, 155, 372 S.W.2d 306, 311-314 (1963).

Most jurisdictions recognize some form of attorney's lien to secure a lawyer's claim for fees should a client fail to compensate the lawyer for the services rendered. See Charles W. Wolfram, Modern Legal Ethics 9.6.3, at 558 (1986). While a lawyer's right to compensation remains based on contract, attorney's liens provide security for these contractual rights. See Feissner v. Prince George's County, 384 A.2d 742, 746 (Md. 1978); Sarmon v. Goldwater, Taber and Hill, 396 P.2d 847, 849 (Nev. 1964).

Two types of attorney's liens exist today either by the common law or by statute. The first type of lien is a retaining lien. A retaining lien is a possessory lien, see Andrew Hall & Assocs. v. Ghanem, 679 So.2d 60, 61 (Fla. Dist. Ct. App. 1996); In re Coronet Ins. Co., 698 N.E.2d 598, 601 (Ill. App. Ct. 1998); Panarello v. Panarello, 585 A.2d 428, 430 (N.J. Super. Ct. Ch. Div. 1990), that permits a lawyer to retain a client's books, papers, securities, or money coming into his or her possession during the course of the representation until the attorney and client have settled their fee dispute or until the client has otherwise posted appropriate security for the outstanding fee. See McDonald, Shea & Co. v. Railroad, 93 Tenn. 281, 293, 24 S.W. 252, 255-56 (1893); Brown & Reid v. Bigley, 3 Tenn. Ch. (Cooper) 618, 621 (1878); Hunt v. McClanahan, 48 Tenn. (1 Heisk.) 503,...