Stasey v. Stasey

• Decision Date: 07 May 1992
• Docket Number: No. 90-2075,90-2075
• Citation: 483 N.W.2d 221,168 Wis.2d 37
• Parties: In re the Marriage of Patrice B. STASEY v. Robert L. STASEY. Patrice B. STASEY, Appellant, v. Kathleen Ortman MILLER, Respondent. d
• Court: Wisconsin Supreme Court

Page 221

483 N.W.2d 221

168 Wis.2d 37

In re the Marriage of Patrice B. STASEY v. Robert L. STASEY Patrice B. STASEY, Appellant, v.Kathleen Ortman MILLER, Respondent. ^d

No. 90-2075.

Supreme Court of Wisconsin.

Argued Feb. 25, 1992.

Decided May 7, 1992.

For the appellant there were briefs (in the court of appeals) by John H. Correll and Correll Law Office, Ltd., Milwaukee and oral argument by John H. Correll.

For the respondent there was a brief (in the court of appeals) by Michael S. Heffernan and Stolper, Koritzinksy, Brewster & Neider, S.C., Madison and oral argument by Michael F. Heffernan.

SHIRLEY S. ABRAHAMSON, Justice.

This is an appeal from an order of the Circuit Court of Waukesha County, Robert G. Mawdsley, Circuit Judge, refusing to vacate that part of the divorce judgment awarding attorney fees and a mortgage lien to Patrice Stasey's attorney, Kathleen Ortman Miller.¹We accepted this appeal on certification from the court of appeals pursuant to sec. (Rule) 809.61, Stats.1989-90.

The court of appeals certified the following issue: When a dispute arises during a divorce action between an attorney and her client about attorney fees, may the circuit court granting the divorce determine the amount of the fees and order a judgment entered in favor of the attorney against her client?In other words, may an attorney who continues to represent a client in a divorce action ask the circuit court to determine fees in lieu of bringing a separate action against the client after the divorce action ends?

We conclude that a circuit court does not have subject matter jurisdiction in a divorce action to determine attorney fees between an attorney and a client whom the attorney continues to represent in the divorce action and to enter judgment therefor.Accordingly we reverse the order refusing to vacate that part of the divorce judgment awarding attorney fees and a mortgage lien to Attorney Miller and remand the matter to the circuit court to vacate that part of the judgment awarding fees and a mortgage lien to Attorney Miller.Our conclusion does not affect a circuit court's power to enter an order relating to attorney fees pursuant to statutory authority granted in secs. 767.23(1)(d),²767.23(3), ³and767.262,⁴Stats.1989-90.

I.

The facts are not in dispute for purposes of this appeal.Patrice B. Stasey(now Bapst) filed for divorce on July 3, 1986.At that time, she was represented by the law firm of Flood & Lauer.On April 16, 1987, Ms. Stasey filed a motion for substitution of attorneys.Pursuant to that motion, Ms. Stasey and Flood & Lauer agreed that a judgment for $7,250, an amount less than Flood & Lauer's original bill to Ms. Stasey, would be entered against Ms. Stasey for payment of Flood & Lauer's attorney fees.The judgment was entered in this compromise amount on May 28, 1987, pursuant to sec. 767.23(3)(a),Stats.1989-90.Ms. Stasey signed a consent for judgment lien, entitling Flood & Lauer to a lien on all assets awarded in the divorce until their attorney fees were paid in full.As of February 2, 1991, Ms. Stasey owed $3,250 on that lien.

Ms. Stasey subsequently retained Attorney Kathleen Ortman Miller.On April 29, 1987, Ms. Stasey signed an agreement with Attorney Miller for payment of attorney fees, costs, and disbursements.Ms. Stasey agreed to pay a $5,000 retainer, which would subsequently be credited against fees and costs.In addition, Attorney Miller's hourly rate was set at $125.00 and Associate Gail Arnold's hourly rate was set at $85.00.The agreement stated that a firm estimate of the maximum fee could not be given because the number of hours of work could not be estimated.Attorney Miller agreed to inform Ms. Stasey of her work by means of a monthly statement showing her legal fees as they accrued.The agreement asked that Ms. Stasey communicate with Attorney Miller if Ms. Stasey had any question about the statement.The agreement reserved the right to Attorney Miller to terminate the attorney-client relationship for nonpayment of fees and costs.Finally, the agreement provided for a mortgage lien upon all assets awarded Ms. Stasey in the divorce action if she failed to keep current with her payments for fees and disbursements.The agreement stated:

If you are unable to keep current with your fees and disbursements, you hereby agree that all outstanding fees and costs incurred on your behalf plus interest accruing thereon will constitute a mortgage lien upon all assets awarded to you in your divorce action.You further agree to execute all documents necessary to effectuate this lien.

Over the next 21 months, the parties engaged in extensive pretrial motions and discovery.According to the record, Attorney Miller sent Ms. Stasey monthly statements of fees and disbursements.

The trial began on January 31, 1989, and ran for five days.On February 2, 1989, Attorney Miller elicited testimony from Ms. Stasey regarding her attorney fees, apparently for the purpose of having the court order Mr. Stasey to pay part of Ms. Stasey's attorney fees pursuant to sec. 767.262,Stats.1989-90, set forth in the margin at note 4.

Attorney Miller established through Ms. Stasey's testimony that the outstanding bills for attorney fees, costs, and disbursements amounted to $24,068.62.(Ms. Stasey had already paid $10,000 to Attorney Miller.)Attorney Miller attempted to elicit testimony from Ms. Stasey that the fees were reasonable and necessary.The circuit court sustained the objection of Mr. Stasey's counsel to this testimony, holding that Ms. Stasey was not competent to testify about the reasonableness of attorney fees because it was not established that she had some basis for giving an opinion.At no time did the court hear testimony from witnesses, expert or otherwise, regarding the reasonableness of Attorney Miller's fees.

Attorney Miller then turned to the issue of Ms. Stasey's liability to Attorney Miller for fees.Attorney Miller asked whether their fee agreement included the provision that "any additional amount not covered by [her] retainer would become a judgment against [her] and a lien against all assets awarded to [her]" in the divorce action.Ms. Stasey answered affirmatively.Transcript of February 2, 1989, at 4.

Attorney Miller then asked: "Mrs. Stasey, do you ask that the court order a lien against your assets to secure payment of my attorney's fees consistent with our written agreement?"Ms. Stasey responded: "I don't know how to answer that.I guess, yes.Or a lien against his estate."Transcript ofFebruary 2, 1989, at 9-10.

The trial recessed on February 7, 1989, and was scheduled to resume on May 18, 1989.On May 15, 1989, the circuit court heard Ms. Stasey's request that Attorney Miller withdraw as counsel and Attorney Miller's motion to withdraw from the case because of "Ms. Stasey's dissatisfaction [with Attorney Miller's strategy] and my lack of control over her at this time."Transcript ofMay 15, 1989, at 25.Ms. Stasey requested time to interview and procure another attorney and to familiarize that attorney with the files.Because it concluded that the issues had already been "thoroughly tried,"the circuit court denied Attorney Miller's motion to withdraw.The circuit court presented Ms. Stasey with the option of proceeding pro se, continuing with Attorney Miller, or finding new counsel willing to represent her when the trial resumed as scheduled on May 18.Ms Stasey chose to continue with Attorney Miller.

The trial reconvened on May 18, 1989, and ended the next day with a finding by the circuit court that the marriage was irretrievably broken.

The circuit court heard several post-trial motions during the following months.On June 22, 1989, Attorney Miller petitioned the circuit court to update the accounting of attorney fees and presented bills that totalled $41,966.71 through the conclusion of the hearing on June 22.Attorney Miller then requested that any assets awarded to Ms. Stasey be subject to a mortgage lien as provided in the fee agreement, telling the circuit court:

And ... the fee agreement has been placed on record, which requires Mrs. Stasey to grant me a mortgage lien against all of the assets awarded to her in this divorce action.The court may recall Mrs. Stasey's testimony in that regard.It was a reluctant acquiescence to, yes, she had made that request and had made that agreement with me and did make that request of the court at this time.

In fact, Your Honor, I do request that any assets awarded to Mrs. Stasey be subjected to the lien provided for in that fee agreement to secure payment of the fees.Transcript of June 22, 1989, at 4.

Attorney Miller continued by stating that it would be unfair to place full responsibility for the fees upon Ms. Stasey and requested contribution from Mr. Stasey directly from the proceeds awarded in the property division.

On July 21, 1989, the circuit court held a hearing to determine the specifics of the property division.Attorney Miller again asked the circuit court to enter a mortgage lien against the assets awarded to Ms. Stasey.Attorney Miller said,

Your Honor, I would like to point out that at the conclusion of trial I requested that the Court recognize the written fee agreement of Mrs. Stasey with my office and grant a mortgage lien against assets awarded to her or otherwise provide a mechanism by which payment will be made.Transcript of July 21, 1989, at 35.

The circuit court responded,

Well, okay.You did request that and I didn't--in pulling the other stuff together, I will just take that under advisement and write you a short decision on that because I didn't--the last time you requested I didn't understand the basis for it and now you have enlightened me....Transcript of July 21, 1989, at 35.

Thereafter, on December 13 and 14, 1989, the circuit court heard argument concerning the proposed findings of fact, conclusions of law, and judgment.One of Attorney Miller's...