Wednesday, June 1, 2016

Imperfect Lien

The Utah Court of Appeals held that a law firm failed to perfect a lien on settlement proceeds after a partner and the case departed

Thomas D. Boyle represented Dawn Woodson in a wrongful death action while he was employed by the law firm Clyde Snow & Sessions PC (Clyde Snow) and then later by Prince Yeates & Geldzahler (Prince Yeates). After six years of litigation the parties reached a settlement. Clyde Snow asserted a lien on a portion of the settlement funds for attorney fees. Prince Yeates interpleaded a portion of the settlement, and the district court awarded those funds to Clyde Snow. Boyle appeals the district court’s order awarding the money to Clyde Snow. Because we determine Clyde Snow did not properly intervene, we conclude the district court lacked jurisdiction to award it attorney fees. We therefore reverse.

The case

In 2007, fifteen-year-old Caleb Jensen died while participating in a wilderness therapy program. His mother, Dawn Woodson, retained Clyde Snow to represent her in a wrongful death action. Boyle was lead counsel on the case. Woodson signed a contingency-fee agreement specifying that Clyde Snow would retain forty percent of any recovery...

In June 2010, three years after the case began, Boyle left Clyde Snow and joined Prince Yeates, and Woodson opted to have her case follow him there. Clyde Snow then filed a notice of its attorney lien. While he was with Prince Yeates, Boyle continued to represent Woodson until the case settled.

Settlement was reached in 2013.

On the merits

An attorney seeking to enforce an attorney lien must do so either "by filing a separate legal action‛ or ‚by moving to intervene in a pending legal action." Utah Code Ann. § 38-2-7(4)(a) (LexisNexis 2014). This section does not confer an unconditional right to intervene. See Bishop v. Quintana, 2005 UT App 509U, para. 5. Instead, a person desiring to intervene must submit a "timely application" and "shall serve a motion to intervene upon the parties as provided in Rule 5."

...Here, Clyde Snow did not file a timely motion to intervene. First, the only filing on behalf of Clyde Snow submitted before the parties’ settlement was a notice of Clyde Snow’s lien. After the parties’ settlement but before the court dismissed Woodson’s claims, Clyde Snow filed a restated notice of its attorney lien and an objection to the parties’ motion to dismiss the case, which stated that "Clyde Snow reserved its statutory right to intervene." But Clyde Snow never actually moved to intervene in the pending action.

Second, even if we construed Clyde Snow’s objection as a deficient attempt to intervene, it was not filed in a timely fashion.

The court also expressed concern about the danger presented to the client's interests

After the defendants expressed their concerns and objections to Clyde Snow’s participation, the court asked if anybody had ‚a strong objection‛ to keeping the case open, and no one replied. The court then decided to keep the case open for the sole purpose of resolving Clyde Snow’s attorney lien issue.

In doing so, the court inappropriately allowed Clyde Snow to derail resolution of the case by objecting to the parties’ stipulated agreement to dismiss Woodson’s claims. The court continuously referenced Clyde Snow and Boyle as parties even though neither had intervened as a party in this case. Although the actual parties did not reply when the court asked if anyone strongly objected to Clyde Snow’s participation, any further objections from the defendants would have been futile. Further, the court’s decision put the actual parties in an untenable situation: they either had to object to Clyde Snow’s presence at the risk of transforming Clyde Snow from non-party status to that of a party or refrain from objecting at the risk of having the court rule in a manner contrary to their interests.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2016/06/the-utah-court-of-appeals-held-that-a-law-firm-failed-to-perfect-a-lien-on-settlement-proceeds-after-a-partner-and-the-case-d.html

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