Yorgan v. Durkin, 2004AP1359.
| Decision Date | 02 June 2006 |
| Docket Number | No. 2004AP1359.,2004AP1359. |
| Citation | 715 N.W.2d 160,2006 WI 60 |
| Parties | Kenneth J. YORGAN, Plaintiff-Respondent-Petitioner, v. Thomas W. DURKIN, Defendant-Appellant. |
| Court | Wisconsin Supreme Court |
For the plaintiff-respondent-petitioner there were briefs and oral argument by Kenneth J. Yorgan, Racine.
For the defendant-appellant there was a brief by John A. Becker and Becker, French & DeMatthew, Racine, and oral argument by John A. Becker.
An amicus curiae brief was filed by Andrew W. Erlandson, Stephen P. Hurley, and Hurley, Burish & Milliken, S.C., Madison, on behalf of the Wisconsin Chiropractic Association, and there was oral argument by Andrew W. Erlandson.
Dr. Kenneth Yorgan seeks review of an unpublished court of appeals decision reversing a circuit court judgment that held Attorney Thomas Durkin liable for Yorgan's chiropractic fees, incurred by Sol Hernandez.1 Hernandez, who was Attorney Durkin's client, signed an agreement with Dr. Yorgan directing her attorney to pay Yorgan and purporting to give a lien against any proceeds she might receive from her personal injury claim. Dr. Yorgan argues that he should be able to enforce the agreement against Attorney Durkin, who distributed the proceeds from Hernandez's claim without paying Yorgan.2
¶ 2 We determine that Dr. Yorgan may not hold Attorney Durkin liable for payment because Durkin did not sign the agreement or otherwise agree to be liable. Additionally, we determine that imposing liability on Durkin is not dictated by public policy. Finally, we determine that Yorgan is not entitled to an equitable lien enforceable against Attorney Durkin. Accordingly, we affirm the court of appeals.
¶ 3 Hernandez was involved in a car accident and received chiropractic treatment from Dr. Yorgan. At some point, Dr. Yorgan provided her with a form entitled "Authorization and Doctor's Lien" that consisted of the following terms:
I do hereby authorize Doctor Kenneth Yorgan to furnish you, my attorney, a full report of the examination, diagnosis, treatment, prognosis etc., of myself, as well as any records or information he may have regarding injuries or health problems I may have arising from a personal injury accident occurring on or about: 8-6-99.3
I hereby authorize and direct you, my attorney, to pay directly to Dr. Yorgan such sums as may be due and owing him for health services rendered to me by reason of this accident and to withhold such sums from any settlement, judgement or verdict as may be necessary to protect his interests. I further hereby give lien on my case to Dr. Yorgan against any and all proceeds of my settlement, judgement or verdict which may be paid to you, my attorney, or myself as a result of the injuries and health problems for which I have been treated or in connection thereto.
I fully understand that I am directly and fully responsible to Dr. Yorgan for all fees submitted by him for services rendered to me and that this agreement is made solely for his additional protection and in consideration of his awaiting payment. I further understand that such payment is not contingent on any settlement, judgement or verdict by which I may eventually recover said fees.
Please acknowledge this letter by signing below and returning to Dr. Yorgan. Retain one copy for your records. I have been advised that if my attorney does not wish to cooperate in protecting Dr. Yorgan's fees, he will not await payment and will require me to make payments on a current basis.
(Emphasis added.)
¶ 4 At the bottom of the form, there was a signature line for Hernandez and a signature line for her attorney. Hernandez signed the form and subsequently retained Attorney Durkin to handle a personal injury claim relating to the car accident. During the course of Durkin's representation of Hernandez, Dr. Yorgan provided Durkin with 13 pages of medical records and included a copy of the form. Durkin, however, never signed it.
¶ 5 Attorney Durkin settled Hernandez's claim and, at some point, had a telephone conversation with Dr. Yorgan in which he asked Yorgan to reduce his bill. Ultimately, Durkin distributed the settlement proceeds without paying Yorgan.
¶ 6 Dr. Yorgan apparently made at least some attempts to collect against Hernandez, but he was unsuccessful. Yorgan thus filed a small claims action against Attorney Durkin, seeking to hold Durkin liable for his failure to forward payment to Yorgan in satisfaction of Hernandez's outstanding account of $2,104.40. Durkin moved for summary judgment, asserting that he did not have actual notice of the form and that Hernandez was an indispensable party as the person responsible for the outstanding balance.
¶ 7 The circuit court ruled in favor of Dr. Yorgan. It determined that Attorney Durkin had actual notice of the form agreement and was bound by its terms to pay Yorgan. The court also determined that Hernandez, whose whereabouts were unknown, was not an indispensable party. Accordingly, the court entered judgment against Durkin.
¶ 8 Attorney Durkin appealed, and the court of appeals reversed the circuit court. It concluded that Durkin was not obligated to honor the agreement between Dr. Yorgan and Hernandez because Durkin had not acknowledged or accepted it. Dr. Yorgan petitioned for review.
¶ 9 In this case, we must address whether Dr. Yorgan may hold Attorney Durkin liable based on the "Authorization and Doctor's Lien" agreement under either a contract or equitable lien cause of action. This requires us to examine and interpret a written instrument to determine its effect. Such an undertaking is a question of law subject to independent appellate review. See Micro-Managers, Inc. v. Gregory, 147 Wis.2d 500, 507, 434 N.W.2d 97 (Ct.App.1988). In addition, we must determine whether liability should otherwise be imposed on Attorney Durkin based on public policy considerations, also a question of law for this court's independent determination. See Auric v. Continental Cas. Co., 111 Wis.2d 507, 512, 331 N.W.2d 325 (1983).
¶ 10 We begin our analysis with Riegleman v. Krieg, 2004 WI App 85, 271 Wis.2d 798, 679 N.W.2d 857, a case in which the court of appeals examined the effect of a similar instrument under circumstances involving an attorney, a chiropractor, and the proceeds from their client/patient's personal injury claim. Riegleman, 271 Wis.2d 798, ¶¶ 1-3, 25, 679 N.W.2d 857. There, however, the attorney had signed the instrument. Id., ¶ 2, 679 N.W.2d 857.
¶ 11 The court in Riegleman addressed whether, under those circumstances, the instrument constituted a contract that made the client/patient and his attorney jointly and severally liable. Id., ¶¶ 25, 27, 679 N.W.2d 857. It determined that the instrument was an unambiguous contract creating an assignment enforceable under contract law. Id., ¶ 36, 679 N.W.2d 857. It concluded that the attorney and the patient/client were jointly and severally liable for the chiropractor's fees. Id., ¶ 38, 679 N.W.2d 857.
¶ 12 In Riegleman, the court of appeals did not address the general assignability of a tort claim or its anticipated proceeds. We observe that the assignment of claims or rights arising under a contract has traditionally been distinguished from the assignment of claims or rights arising from a tort. See 9 Corbin on Contracts, §§ 856-57 (Interim ed.2002); see also Restatement (2d) Contracts § 316 (1981). As a general rule, the latter are not as easily assignable as the former. 9 Corbin on Contracts, § 857, at 364; see also R.D. Hursh, Assignability of Claim for Personal Injury or Death, 40 A.L.R.2d 500, § 2 (1955).
¶ 13 The parties have not briefed the issue of the assignability of a claim or right arising from a tort. Neither the court of appeals nor the circuit court here saw fit to reach out and address the issue. Likewise, we refrain from reaching it. "We cannot serve as both advocate and judge." State v. Pettit, 171 Wis.2d 627, 647, 492 N.W.2d 633 (Ct.App.1992). Rather, we will assume without deciding that the "Doctor's Lien and Authorization" is a valid assignment but conclude that Dr. Yorgan cannot enforce it against Attorney Durkin for the reasons that follow.4
¶ 14 Riegleman does not answer the question before us because the court in Riegleman did not address the issue of whether an attorney may be liable even though the attorney has not signed or otherwise accepted the terms of an agreement like the one here. The court's holding depended on the fact that the attorney had signed and therefore accepted the terms of the agreement. See Riegleman, 271 Wis.2d 798, ¶¶ 27, 35, 37, 679 N.W.2d 857.5
¶ 15 In our view, it is significant whether the attorney has signed the agreement or otherwise accepted its terms. Here, applying basic contract principles, we determine that Attorney Durkin was not a party to the agreement and not bound by it. Dr. Yorgan had no reasonable expectation that Durkin would be bound by the agreement if he did not sign it. Likewise, Yorgan had no reasonable reliance interest in Durkin's acceptance or rejection of the agreement. This is plain from the terms of the agreement, which Dr. Yorgan, not Hernandez or Attorney Durkin, supplied.
¶ 16 Specifically, we look to the following terms of the agreement:
I fully understand that I am directly and fully responsible to Dr. Yorgan for all fees submitted by him for services rendered to me and that this agreement is made solely for his additional protection and in consideration of his awaiting payment.. . .
. . . I have been advised that if my attorney does not wish to cooperate in protecting Dr. Yorgan's fees, he will not await payment and will require me to make payments on a current basis.
(Emphasis added.)
¶ 17 These terms of the agreement condition Dr. Yorgan's offer to await payment on the attorney's signature. They also indicate that Dr. Yorgan could not have reasonably expected that Hernandez's attorney would be bound by...
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