Warren v. Stanfield (In re Stanfield)

Decision Date07 February 2012
Docket NumberNo. 107,292.,107,292.
Citation2012 OK 8,276 P.3d 989
PartiesIn the Matter of the GUARDIANSHIP OF Tracy Delbert STANFIELD. Loyde H. Warren, Appellant, v. Mildred Stanfield, Guardian of the Estate of Tracy Delbert Stanfield, Appellee.
CourtOklahoma Supreme Court


On Certiorari to Oklahoma Court of Civil Appeals, Division No. III.

¶ 0 In a guardianship proceeding a lawyer sought court approval of a contingent fee contract for legal representation of the ward where the representation and payment had already occurred. Guardian objected to court approval because it was not sought prior to payment of the fees. The Honorable Timothy L. Olsen, Associate District Judge, Seminole County, denied the lawyer's motion for court approval of the contract and payment of fees. Lawyer appealed and the Court of Civil Appeals affirmed the order. We hold that: (1) A District Court possesses jurisdiction to adjudicate in a guardianship proceeding a motion seeking court approval of a lawyer's contingent fee contract; (2) A guardian's failure to obtain court approval of a contingent fee agreement prior to payment pursuant to that agreement is not, by itself, a legally sufficient reason for a court to deny a motion to approve the agreement; and (3) The mere passage of time between creation of a contingent fee agreement and when it is presented to a court for approval in an open and continuing guardianship proceeding is not a legally sufficient reason to deny approval of that agreement.


Ronald A. Schaulat, Oklahoma City, Oklahoma, for Appellant.

Jerry Colclazier, Colclazier & Associates, Seminole, Oklahoma, for Appellee.


¶ 1 The issues before us are: (1) Does a District Court in a guardianship proceeding have jurisdiction to approve a contingent fee agreement made by a guardian on behalf of a ward; (2) May a court in a guardianship proceeding decline to approve a contingent fee agreement for payment of a lawyer's services provided to the ward merely because payments pursuant to that agreement were made prior to court approval being sought; and (3) May a court in an open and continuing guardianship proceeding deny a motion to approve a contingent fee contract merely because of the length of time between creation of the contract and seeking court approval. We answer the first question in the affirmative and the second two in the negative.

¶ 2 Tracy Stanfield was injured in 1992. A settlement relating to his injuries resulted in an annuity providing periodic payments to Stanfield from Metropolitan Life Insurance Company (MetLife). In 1996, Stanfield assigned certain annuity payments, and the assignee in turn assigned them to J.G. Wentworth S.S.C. Limited Partnership (Wentworth). In 1998, Stanfield caused MetLife to ignore the assignments to Wentworth.

¶ 3 Wentworth responded by filing an action in a Pennsylvania state court, and in May 1998 obtained a judgment against Stanfield for $572,747.05. Wentworth then filed a motion for a judgment against garnishee MetLife for the same amount. The Court of Common Pleas, Philadelphia County, granted the motion in September 1998.

¶ 4 Stanfield's mother, Mildred Stanfield, filed a petition in the District Court of Seminole County, Oklahoma, to be appointed guardian of her son's estate. She was appointed guardian in March 1999. In March 2001, MetLife filed an interpleader action in the United States District Court for the Eastern District of Pennsylvania and named as defendants Wentworth and Mildred Stanfield in her capacity as guardian of her son's estate. Mildred Stanfield asked Loyde Warren to accept service of process on her behalf, and he agreed. The judge in the federal case ordered a settlement conference. In May 2001, Stanfield signed Warren's contingency fee agreement that provided a legal fee of 33% of the gross recovery after legal costs were deducted, and if a hearing or trial was necessary, a fee of 40% of the gross recovery after legal costs were deducted.1

¶ 5 Warren engaged local counsel in Pennsylvania.2 That lawyer filed an answer in the federal case. At the settlement conference the parties agreed that Wentworth's judgment for $572,747.05 would be withdrawn; payment of $154,279.73 would be paid from Stanfield's annuity payments to Wentworth; the annuity assignment was rescinded; and future annuity payments from MetLife to Stanfield, as guardian, would be made payable in care of Warren. In September 2001, a consent order and settlement agreement was filed in the federal case. In 2005, Stanfield (or Guardian) obtained new counsel. Appellate briefs by both parties agree that in the District Court of Oklahoma County an action was filed against Warren relating to his representation of the ward; 3 however, none of the filings in that case are part of the certified appellate record before us.4

¶ 6 In 2009, Warren filed a motion in the open and continuing guardianship case before the District Court of Seminole County for court approval of both the 2001 contract for legal representation and the payment of legal fees made pursuant to that contract. Guardian objected and argued that: (1) A contingency fee for successfully defending a client from a judgment was improper, and Warren's motion in this case was similar to a lawyer obtaining a contingency fee for successfully defending a client in a residential mortgage foreclosure proceeding and requesting 40% of the residence as a fee; (2) Guardian had been paying Warren based upon an hourly billing method, and Warren had improperly induced Guardian to sign the contingency fee agreement; (3) The fee agreement was unenforceable because it had not been approved by the guardianship court; and (4) The motion should be denied because of breach of contract, fraud, breach of a fiduciary duty, and negligence.

¶ 7 The District Court stated, “Because the application was not filed prior to payment of the fee and was not filed until nearly eight years after the contract was executed, the Court DENIES the Application.” Warren appealed. The Court of Civil Appeals agreed with the District Court that Warren's request for approval of attorney fees was properly denied. The appellate court also stated that Warren could be entitled to legal fees if he showed that his services were necessary for the protection of the Ward's estate, the services were beneficial to the estate, and that the amount sought was reasonable, reflecting the trial court's statement in its order that Warren was entitled to “reasonable compensation.”

¶ 8 Warren petitioned for certiorari, which we granted.5 Warren argues that a contingent fee agreement may be approved by the probate court after payment of the fee. He states that the contingent fee contract would have been approved by a court in 2001, and so a court should approve it now. He argues that the particular circumstances of his employment should be considered to create an exception to statutory language requiring court approval prior to payment. He also argues that 30 O.S. § 4–403(D) “exempts contingency fee contracts from the Guardianship Act,” and that court approval is not required as a condition to enforce the fee agreement.

¶ 9 In a guardianship proceeding the procedure for payment of compensation to attorneys, guardians ad litem, and persons conducting evaluations is provided by a statute, 30 O.S.2001 § 4–403, which states:

A. 1. An attorney, other than a public defender, for a ward or a subject of a proceeding pursuant to the Oklahoma Guardianship and Conservatorship Act or whose services are obtained by a guardian on behalf of a ward is entitled to reasonable compensation to be paid from and as a charge against the estate of the ward. Reasonable compensation for attorney services rendered and expenses made on behalf of the guardian of the ward incurred prior to the appointment of the guardian may be paid from and charged against the estate of the ward, as approved by the court prior to payment.

2. Guardians ad litem, other than an employee of a public agency or an employee of a private agency which provides such service pursuant to a contract with a public agency, appointed pursuant to the provisions of this act are entitled to reasonable compensation.

3. A person conducting an evaluation of the subject of the proceeding, whose services resulted in the appointment of a limited guardian or guardian or other order beneficial to the subject of the proceeding, is entitled to reasonable and necessary compensation.

B. 1. Compensation and reimbursements pursuant to this section shall be paid from the financial resources of the subject of the proceeding unless the court determines that such payment of compensation and reimbursements would:

a. substantially impede the partially incapacitated or incapacitated person from meeting the essential requirements for his physical health or safety, and

b. substantially impair the financial resources of such person, or substantially impede his ability to obtain the services necessary for developing or regaining his abilities to the maximum extent possible.

2. If not otherwise compensated or reimbursed pursuant to the provisions of paragraph 1 of this subsection:

a. any attorney or guardian ad litem appointed by the court who is entitled to compensation shall be compensated from the court fund of the court having jurisdiction,

b. the cost of services provided by a person conducting an evaluation, when such person is the employee of a public agency or the employee of a private agency which provides such services for guardianship proceedings pursuant to an agreement with a public agency, shall be borne by the public agency, or by the private agency in accordance with the terms of such agreement, and

c. if the person conducting an evaluation is a private individual or agency and the cost of the...

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