Case Title: Kenneth J. Yorgan v. Thomas W. Durkin

Citation: 2006 WI 60

Docket Number: 2004AP001359

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2006-06-02T00:00:00Z

Document:
2006 WI 60 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2004AP1359 
 
 
COMPLETE TITLE: 
 
 
Kenneth J. Yorgan, 
          Plaintiff-Respondent-Petitioner, 
     v. 
Thomas W. Durkin, 
          Defendant-Appellant. 
 
 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at: 277 Wis. 2d 876, 690 N.W.2d 886 
(Ct. App. 2004 – Unpublished) 
 
 
OPINION FILED: 
June 2, 2006   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
November 15, 2005   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Racine   
 
JUDGE: 
Charles H. Constantine   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
WILCOX, J., concurs (opinion filed).   
 
DISSENTED: 
ROGGENSACK, J., dissents (opinion filed). 
BUTLER, JR., J., joins the dissent.   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
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. 
 
 
2006 WI 60
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2004AP1359  
(L.C. No. 
2003SC5353) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Kenneth J. Yorgan, 
 
          Plaintiff-Respondent-Petitioner, 
 
     v. 
 
Thomas W. Durkin, 
 
          Defendant-Appellant. 
 
 
 
FILED 
 
JUN 2, 2006 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
ANN WALSH BRADLEY, J.   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review of an unpublished court of appeals decision reversing a 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 
                                                 
1 See Yorgan v. Durkin, No. 2004AP1359, unpublished slip op. 
(Wis. Ct. App. Nov. 17, 2004) (reversing the judgment of the 
circuit court for Racine County, Charles H. Constantine, Judge).   
No. 
2004AP1359   
 
2 
 
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. 
I 
¶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 
                                                 
2 Yorgan is proceeding pro se in this case, but the 
Wisconsin Chiropractic Association has submitted an amicus 
brief.  Unless otherwise indicated, we simply refer to Yorgan 
when discussing the arguments made by either him or the 
Association. 
3 The accident date was hand-written on the form. 
No. 
2004AP1359   
 
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 
No. 
2004AP1359   
 
4 
 
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. 
II 
¶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 
No. 
2004AP1359   
 
5 
 
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).   
III 
¶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.  There, however, the 
attorney had signed the instrument.  Id., ¶2.   
¶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.  It determined that the instrument was 
an unambiguous contract creating an assignment enforceable under 
contract law.  Id., ¶36.  It concluded that the attorney and the 
patient/client were jointly and severally liable for the 
chiropractor's fees.  Id., ¶38. 
¶12 In Riegleman, the court of appeals did not address the 
general assignability of a tort claim or its anticipated 
No. 
2004AP1359   
 
6 
 
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 
                                                 
4 The proper procedure is to have an issue raised, briefed, 
and argued by the parties before deciding it.  Nevertheless, the 
dissent reaches out and addresses this issue.  The dissent 
decides the issue, comparing the case at bar to the case of 
D'Angelo v. Cornell Paperboard Products Co., 19 Wis. 2d 390, 
396-97, 120 N.W.2d 70 (1963).  In D'Angelo, this court stated 
that personal injury claims are assignable, subject to public 
policy limitations.  Id. at 396-97.  D'Angelo, however, is an 
insurance subrogation case.  It involved a claim between two 
insurance companies after one of them had settled with the 
plaintiff in exchange for an assignment of rights. 
No. 
2004AP1359   
 
7 
 
¶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 
                                                                                                                                                             
We have located only two cases that cite D'Angelo for the 
proposition that a personal injury claim may be assignable.  
Those cases are also insurance subrogation cases.  See American 
Ins. Co. v. City of Milwaukee, 51 Wis. 2d 346, 353-54, 187 
N.W.2d 142 (1971); Associated Hosp. Serv., Inc. v. Milwaukee 
Auto. Mut. Ins. Co., 33 Wis. 2d 170, 173 n.3, 147 N.W.2d 225 
(1967).  The dissent is alone in asserting the relevancy of 
D'Angelo to the instant case.  Neither the parties, the amicus, 
the circuit court, nor the court of appeals have found it 
relevant to the analysis.  
The dissent apparently believes that Dr. Yorgan should be 
treated just like an insurance company that has a subrogation 
clause in its policy.  The public policy implications of the 
dissent's 
willingness 
to 
do 
so 
are 
significant, 
as 
our 
discussion in ¶¶30-33 of this opinion suggests. 
In addition, the ramifications of extending subrogation 
jurisprudence in such a fashion are unexplored.   For example, 
under the dissent's insurance-subrogation approach, must there 
be a hearing under Rimes v. State Farm Mutual Automobile 
Insurance Co., 106 Wis. 2d 263, 316 N.W.2d 348 (1982), to 
determine whether Hernandez has been made whole before Dr. 
Yorgan can collect?  Under the dissent's insurance-subrogation 
approach, would Dr. Yorgan have been a necessary party to 
Hernandez's personal injury action?  See Wis. Stat. § 803.03(2) 
(2003-04).  Unlike the dissent, we think that before this court 
confronts the issue of the assignability of a tort claim (or its 
anticipated proceeds) in such a novel manner, the issue should 
be presented in the case and tested by adversarial briefs of the 
parties. 
No. 
2004AP1359   
 
8 
 
attorney had signed and therefore accepted the terms of the 
agreement.  See Riegleman, 271 Wis. 2d 798, ¶¶27, 35, 37.5  
¶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 
                                                 
5 The Riegleman court relied, in part, on Wis. Stat. 
§ 402.210(5), a statutory provision pertaining to assignments 
and found within Wisconsin's version of the Uniform Commercial 
Code in the chapter covering sales contracts.  See Riegleman v. 
Krieg, 2004 WI App 85, ¶26, 271 Wis. 2d 798, 679 N.W.2d 857.  We 
do not place reliance on § 402.210(5) because we question its 
applicability to the types of instruments at issue in Riegleman 
and the case at bar.  See Wis. Stat. § 402.102 ("Unless the 
context otherwise requires, this chapter applies to transactions 
in goods . . . ."). 
All references to the Wisconsin Statutes are to the 2003-04 
version unless otherwise indicated. 
 
 
No. 
2004AP1359   
 
9 
 
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 the agreement without 
signing it.  Similarly, they show that Dr. Yorgan did not 
reasonably 
rely 
on 
the 
agreement 
as 
to 
the 
attorney's 
responsibility for payment absent an attorney signature. 
¶18 The plain language of the agreement contemplates that 
Hernandez's attorney might not sign it, and the agreement 
reserved to Dr. Yorgan the option of effectively canceling it in 
that event.  By its terms, Dr. Yorgan was free to require 
Hernandez to remain current on her account unless her attorney 
signed it. 
¶19 Dr. Yorgan apparently chose not to fully enforce the 
terms of the agreement against Hernandez.  Rather, he permitted 
her to accumulate an outstanding balance of over $2,000 even 
though her attorney never signed the agreement. 
¶20 We also determine that Attorney Durkin cannot be 
deemed to have otherwise accepted the terms of the agreement 
under the circumstances of this case.  Although he received 
copies of Hernandez's medical records from Dr. Yorgan, they were 
not consideration or an independent benefit provided by Dr. 
No. 
2004AP1359   
 
10 
 
Yorgan to Durkin.  Attorney Durkin received the records on 
Hernandez's behalf in the course of his representation of 
Hernandez.  Durkin's receipt of the records cannot constitute 
his acceptance of the terms of the agreement or otherwise give 
rise to a contractual obligation running from him to Yorgan.6 
¶21 In some circumstances, an attorney may agree to be 
contractually bound by proffering a "letter of protection."  
Such 
letters 
are 
"a 
common 
practice 
by 
which 
lawyers 
representing personal injury plaintiffs ensure clients will 
receive necessary medical treatment, even if unable to pay until 
the case is concluded."  Riegleman, 271 Wis. 2d 798, ¶30 n.5 
(citing In re Moore, 4 P.3d 664, 665 n.1 (N.M. 2000)).  Use of 
the letter has been explained as "a document by which a lawyer 
notifies a medical vendor that payment will be made when the 
case is settled or judgment is obtained."  Id.  Here, Attorney 
Durkin was not bound either as a party to the agreement or by 
any other instrument such as a letter of protection. 
                                                 
6 We have no reason to think that the records Dr. Yorgan 
provided to Attorney Durkin were anything other than copies of 
Hernandez's pre-existing health care records, generated in the 
normal course of her treatment.  In other words, it is not the 
situation here that Dr. Yorgan went uncompensated for creating 
an expert report or similar document at Attorney Durkin's 
request. 
In addition, we note that we need not reach the issue of 
whether a health care provider's agreement to provide health 
care records to a patient or her representative can, by itself, 
constitute consideration for a contract between a health care 
provider and a patient or the patient's representative.  See 
Wis. Stat. §§ 146.83 and 146.81(1)(b), (3), and (4).   
No. 
2004AP1359   
 
11 
 
¶22 In Riegleman, the court relied on four cases from two 
other jurisdictions.  In all but one of the cases, Berkowitz v. 
Haigood, 606 A.2d 1157, 1158-59 (N.J. Super. Ct. Law Div. 1992), 
it was clear that the attorney had either signed an agreement or 
sent a letter of protection.  See Moore, 4 P.3d at 665; Matter 
of Rawson, 833 P.2d 235, 238 (N.M. 1992); Romero v. Earl, 810 
P.2d 808, 808-09 (N.M. 1991).  There are other cases along 
similar lines.  See Santiago v. Klosik, 404 S.E.2d 605, 606 (Ga. 
Ct. App. 1991); In the Matter of Allen, 802 N.E.2d 922, 924 
(Ind. 2004).  Our conclusion that Attorney Durkin was not bound 
either as a party to the agreement or by any other instrument is 
supported by the great weight of these authorities.7 
¶23 Dr. Yorgan nonetheless argues that Attorney Durkin's 
duty was to follow his client's directions, which Yorgan asserts 
were clear under the agreement.  Therefore, Yorgan asserts, 
Durkin is liable to him because he failed to pay Hernandez's 
outstanding balance according to her directions.  We do not 
agree with Yorgan's analysis of Attorney Durkin's liability. 
¶24 Initially we observe that it is not accurate to say 
that 
agreements 
such 
as 
the 
one 
here 
necessarily 
and 
unequivocally dictate the scope of an attorney's duty to his or 
her client.  What the attorney's duty to the client requires in 
the face of such an agreement will depend on the facts of the 
case, including whether the attorney signed the agreement. 
                                                 
7 Some of these cases are attorney discipline cases and 
therefore do not address attorney liability in a civil suit.  
No. 
2004AP1359   
 
12 
 
¶25 For example, if the attorney has not signed the 
agreement and knows that the client disputes the reasonableness 
of fees charged by a health care provider, the attorney may 
actually breach his or her duty to the client by paying the 
provider.  However, if the attorney has signed the agreement and 
knows of such a dispute, the attorney may be obligated to 
withhold the amount of disputed funds from the client; if the 
attorney does not want to hold funds indefinitely, then the 
attorney has the option of bringing an action for declaratory 
judgment to seek guidance from the court.  Riegleman, 271 
Wis. 2d 798, ¶36.8  
¶26 Having made that initial observation, we will assume 
that Dr. Yorgan is correct that Attorney Durkin's duty to 
                                                 
8 See also SCR 20:1.15(d) (2006).  We note that the Rules of 
Professional Conduct for Attorneys are not determinative of an 
attorney's civil liability: 
Violation of a rule should not give rise to a 
cause of action nor should it create any presumption 
that a legal duty has been breached.  The rules are 
designed to provide guidance to lawyers and to provide 
a 
structure 
for 
regulating 
conduct 
through 
disciplinary agencies.  They are not designed to be a 
basis for civil liability. . . . 
SCR 20, Preamble; see also Williams v. Rexworks, Inc. 2004 WI 
App 228, ¶20, 277 Wis. 2d 495, 691 N.W.2d 897 ("[I]t is clear 
from the preamble, and from the lack of any authority to the 
contrary, that the [Rules of Professional Conduct for Attorneys] 
do not provide an independent basis for civil liability, and do 
not create any presumption 
that 
a 
legal 
duty 
has 
been 
breached."); 
Nauga, 
Inc. 
v. 
Westel 
Milwaukee 
Co., 
216 
Wis. 2d 306, 318 n.5, 576 N.W.2d 573 (Ct. App. 1998).  Thus, we 
need not and do not address the applicability of the Rules to 
the circumstances here. 
No. 
2004AP1359   
 
13 
 
Hernandez was to pay Yorgan.  Even so, this does not necessarily 
mean that Yorgan may hold Durkin liable for breaching that duty. 
¶27 "[T]he well established rule of law in Wisconsin is 
that absent fraud or certain public policy considerations, an 
attorney is not liable to third parties for acts committed in 
the exercise of his duties as an attorney."  Newhouse v. 
Citizens Sec. Mut. Ins. Co., 176 Wis. 2d 824, 841, 501 N.W.2d 1 
(1993); accord Green Spring Farms v. Kersten, 136 Wis. 2d 304, 
321, 401 N.W.2d 816 (1987); Auric, 111 Wis. 2d at 512; Beauchamp 
v. Kemmeter, 2001 WI App 5, ¶7, 240 Wis. 2d 733, 738, 625 N.W.2d 
297 (Ct. App. 2000).9 
¶28 Here, Yorgan is not alleging or asserting fraud or 
collusion.  Thus, we are faced with the question of whether to 
recognize a new type of exception to the general rule of 
attorney non-liability to third parties.  This requires that we 
consider the public policy implications of such an exception.  
                                                 
9 Absent fraud, it appears that the only well-established 
exception to the general rule of attorney non-liability to third 
parties arises in the estate planning context.  Auric v. 
Continental Cas. Co., 111 Wis. 2d 507, 512, 331 N.W.2d 325 
(1983) (holding that the beneficiary of a will may maintain an 
action against an attorney who negligently drafted or supervised 
the execution of the will); Wisconsin Acad. of Sciences, Arts & 
Letters v. First Wisconsin Nat'l Bank, 142 Wis. 2d 750, 758, 419 
N.W.2d 301 (Ct. App. 1987) (applying the holding in Auric to a 
trust); cf. Beauchamp v. Kemmeter, 2001 WI App 5, ¶9, 240 
Wis. 2d 733, 738, 625 N.W.2d 297 (Ct. App. 2000) (holding that a 
third party's cause of action under Auric is limited to 
situations in which the third party is named in an executed or 
unexecuted will or similar estate planning document). 
No. 
2004AP1359   
 
14 
 
Newhouse, 176 Wis. 2d at 841; see also Auric, 111 Wis. 2d  at 
512. 
¶29 There is no set list of public policy factors to 
consider.10  Our review of the relevant case law leads to the 
conclusion that we must consider the particular public policies 
implicated by the nature of the situation at hand.  In addition, 
the cases suggest that the factors to consider may include (1) 
whether imposing liability in favor of a third party may 
compromise the attorney's duties to his or her client, see Green 
Spring Farms, 136 Wis. 2d at 329, and (2) whether the third 
party is aware of the potential for harm and has the obligation 
or ability to undertake his or her own investigation of the 
matter to protect himself or herself, see id. at 324; Goerke v. 
Vojvodich, 67 Wis. 2d 102, 107, 226 N.W.2d 211 (1975). 
¶30 Turning 
to 
the 
public 
policies 
that 
this 
case 
implicates, we determine that, on balance, they do not dictate 
in favor of liability.  We are mindful that agreements such as 
the one between Dr. Yorgan and Hernandez arguably may help to 
                                                 
10 The court in Auric, in addressing liability in will 
beneficiary suits against attorneys, adopted a five-factor test 
used in other jurisdictions.  The factors are "the extent to 
which the transaction was intended to affect the plaintiff, the 
foreseeability of harm to him, the degree of certainty that the 
plaintiff suffered injury, the closeness of the connection 
between the defendant's conduct and the injury, and the policy 
of preventing future harm."  Auric,  111 Wis. 2d  at 514 
(quoting Lucas v. Hamm, 364 P.2d 685, 687 (Cal. 1961)).  The 
court subsequently explained in Green Spring Farms v. Kersten, 
136 Wis. 2d 304, 326-27, 401 N.W.2d 816 (1987), that the 
application of this test is restricted to the estate planning 
context. 
No. 
2004AP1359   
 
15 
 
facilitate access to health care for some patients.  However, we 
are also mindful that these same patients may need access to 
attorneys and courts in order to receive compensation for their 
injuries and otherwise vindicate their rights. 
¶31 Allowing third-party creditors such as Dr. Yorgan to 
hold liable an attorney with notice of client debt, absent more, 
may deter attorneys from accepting personal injury cases and 
negatively impact injured parties' access to courts.  This would 
be particularly true, as here, when it appears that a claim is 
relatively small and that the claimant's financial resources are 
limited.  Taking a broader view than Dr. Yorgan does, we must 
bear in mind that it is the willingness of attorneys to take 
these types of cases that helps ensure compensation not only for 
patients who are tort victims but also for health care providers 
who are their creditors. 
¶32 We see no readily discernable stopping point on 
attorney liability if liability is imposed for the reasons 
Yorgan advances.  A variety of client creditors would need only 
send the client's attorney a copy of their agreements with the 
client in order to enlist the attorney as a de facto collection 
agent who would be required to correctly prioritize and pay 
client debts or risk liability.  Putting attorneys in this 
position may compromise their duties to their clients. 
¶33 It is not difficult to imagine a proliferation of 
agreements like those here, in which clients seek to give an 
interest in personal injury claim proceeds as security to 
creditors in addition to health care providers.  For example, 
No. 
2004AP1359   
 
16 
 
Durkin's attorney relates an instance in which a client had 
assigned a portion of anticipated proceeds from a personal 
injury claim to the client's landlord in order to avoid 
eviction. 
¶34 In addition, for reasons we have already discussed, 
Dr. Yorgan should have known based on the plain language of the 
agreement that he might not be protected unless Attorney Durkin 
signed the agreement or took some other affirmative action.  Dr. 
Yorgan was, or should have been, aware of the potential for harm 
that an unsigned agreement could create.  At the same time, he 
had at least some ability to seek to ensure his protection by 
insisting on an attorney's signature on the agreement or a 
letter of protection.   
¶35 We are sympathetic to Dr. Yorgan and commend him for 
his efforts, as described at oral argument, to serve patients 
who would ordinarily have difficulty affording or otherwise 
accessing chiropractic services.  However, we must look beyond 
this case to the consequences that are likely to follow from the 
type of new exception to the general rule of attorney non-
liability to third parties he asks us to impose.  On balance, we 
think that public policy considerations weigh in favor of 
declining to adopt a new exception.  
¶36 Finally, we turn to an argument made by the Wisconsin 
Chiropractic Association that Dr. Yorgan should be deemed to 
have a lien that is personally enforceable against Attorney 
Durkin.  Specifically, the Association is arguing that Yorgan 
No. 
2004AP1359   
 
17 
 
should have an equitable lien against Hernandez's settlement 
proceeds and enforceable against Durkin. 
¶37 In addressing this argument, we begin by observing 
that the legislature has enacted very few statutory lien 
provisions.  More specifically, and as relevant here, the 
statutory lien provisions for a health care provider that the 
legislature has enacted are limited to entities operating as a 
charitable institution and maintaining a hospital in this state.  
Wis. Stat. § 779.80.11  In order for such a lien to attach to a 
personal injury claim or the proceeds resulting from it, the 
hospital must comply with detailed notice requirements.  See 
§ 779.80(2) and (3).  Some states, unlike Wisconsin, have 
statutory lien provisions that cover a relatively broad class of 
health care providers in relation to services provided for 
personal injury claimants.  See, e.g., Neb. Rev. Stat. § 52-401 
(2005); Okla. Stat. tit. 42, § 46 (2005). 
¶38 An equitable lien, in contrast, is a more general 
creature of the law.  "The essential elements of equitable liens 
include (1) a debt, duty or obligation owing by one person to 
another[,] and (2) a res to which that obligation fastens, which 
can be identified or described with reasonable certainty."  
McIntyre v. Cox, 68 Wis. 2d 597, 602, 229 N.W.2d 613 (1975) 
                                                 
11 Among the few statutory lien provisions enacted by the 
legislature are those for attorney's fees.  See Wis. Stat. 
§§ 757.36, 757.37, and 757.38; see also Stasey v. Stasey, 168 
Wis. 2d 37, 53, 483 N.W.2d 221 (1992). 
No. 
2004AP1359   
 
18 
 
(citations omitted).12  In Wisconsin, the equitable lien doctrine 
is based on the Restatement (2d) of Restitution.  See id. at 
601.  The Restatement provides that "[w]here property of one 
person can by a proceeding in equity be reached by another as 
security for a claim on the ground that otherwise the former 
would 
be 
unjustly 
enriched, 
an 
equitable 
lien 
arises."  
Restatement (2d) of Restitution § 161 (1937); see also McIntyre, 
68 Wis. 2d at 601. 
¶39 We determine that Dr. Yorgan is not entitled to an 
equitable lien enforceable against Attorney Durkin for at least 
three reasons.  First, it is Hernandez, not Attorney Durkin, who 
has been unjustly enriched at Dr. Yorgan's expense.  Second, 
allowing for an equitable lien in this manner would seem to 
circumvent the general rule against attorney non-liability to 
third parties, undermining the public policy analysis that we 
must undertake before adopting a new exception to that rule. 
¶40 Third, the imposition of an equitable lien in favor of 
Dr. Yorgan and against Attorney Durkin would be inconsistent 
with the legislature's policy choice, as reflected in the 
hospital lien statute:  to limit lien rights to a narrow class 
                                                 
12 The Association states that there are three elements for 
an equitable lien as follows:  "The necessary elements of an 
equitable lien are [1] 'a debt, duty or obligation owing by one 
person to another' and [2] a 'res to which that obligation 
fastens'; [3] they arise 'from written contracts showing an 
intention to charge some particular property with the payment of 
a debt.'"  O'Connell v. O'Connell, 2005 WI App 51, ¶13, 279 
Wis.2d 406, 694 N.W.2d 429 (quoting McIntyre v. Cox, 68 
Wis. 2d 597, 602, 229 N.W.2d 613 (1975)).  The formulation of 
the elements is not important for purposes of this case. 
No. 
2004AP1359   
 
19 
 
of health care providers and to qualify those rights with 
detailed notice requirements.  If there is to be a change in the 
law that has the effect of altering the scheme of health care 
provider liens in the personal injury context, the legislature 
is in the better position to make that change. 
¶41 In addition, the parties have not fully briefed the 
issue of whether the future proceeds of a tort claim may 
constitute a res to which an equitable lien may fasten.  A res 
to which an obligation fastens is a necessary element of an 
equitable lien claim.  The principal case cited by the 
Association on this issue, however, appears to stand for the 
proposition that an equitable lien generally does not arise from 
a promise to pay an obligation from insurance proceeds that are 
expected to be received in the future.  See Bartholomew v. 
Thieding, 225 Wis. 135, 138-39, 273 N.W. 468 (1937).13  
 
                                                 
13 Our research into Wisconsin law leaves unclear whether 
the anticipated proceeds of a tort claim may constitute a res to 
which an equitable lien may fasten.  See O'Connell, 279 
Wis. 2d 406, ¶16 n.10 (explaining that no equitable lien was 
created in the case of McIntyre because the claimant had an 
interest in proceeds, not land, and because no debt existed 
until the property was sold).  Yet, the existence of such a res 
is a necessary ingredient to the dissent.  We note that 
essentially all of the Wisconsin cases cited by the dissent in 
support of its equitable lien analysis involve real estate.  See 
generally In re Stoffregen, 206 B.R. 939 (Bankr. E.D. Wis. 
1997); Rock River Lumber Corp. v. Universal Mortgage Corp., 82 
Wis. 2d 235, 262 N.W.2d 114 (1978); Carefree Homes, Inc. v. 
Production Credit Ass'n, 81 Wis. 2d 541, 260 N.W.2d 759 (1978); 
McIntyre, 68 Wis. 2d 597; Citizens Loan & Trust Co. v. Witte, 
110 Wis. 545, 86 N.W. 173 (1901); O'Connell, 279 Wis. 2d 406. 
No. 
2004AP1359   
 
20 
 
IV 
¶42 In sum, 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 Durkin.14  
Accordingly, we affirm the court of appeals. 
By the Court.—The decision of the court of appeals is 
affirmed. 
 
  
  
 
 
                                                 
14 Having made these determinations, we need not reach 
Attorney Durkin's argument that the circuit court should have 
dismissed the case because Hernandez was an indispensable party. 
No.  2004AP1359.jpw 
 
1 
 
 
¶43 JON P. WILCOX, J.   (concurring).  I ultimately join 
the majority opinion.  The law in Wisconsin on this particular 
issue is meager at best, but it does suggest that an attorney 
cannot be held liable to a third-party creditor for a failure to 
ensure payment when the attorney does not agree to a purported 
assignment 
of 
settlement 
proceeds. 
 
Notwithstanding 
this 
holding, I write separately to express my view that in cases 
such as this, an exception should be made when the attorney has 
actual notice of a professed assignment of settlement funds 
between a client and a health care provider.  As such, I 
respectfully concur. 
¶44 After injuring herself in a motor vehicle accident, 
Sol Hernandez sought chiropractic treatment from Dr. Yorgan.  
Hernandez was unable to pay for the treatment she received from 
Dr. Yorgan, so she executed a form entitled "Authorization and 
Doctor's Lien" (Agreement) provided by Dr. Yorgan.  See majority 
op., ¶3.   
¶45 Hernandez subsequently sought an attorney to handle 
her personal injury claim, and she eventually retained Attorney 
Durkin.  After Hernandez completed treatment with Dr. Yorgan, 
Attorney Durkin requested Hernandez's medical records from Dr. 
Yorgan's office.  Dr. Yorgan sent the records and included the 
Agreement.  Attorney Durkin never signed it, but there is no 
dispute that he had actual notice about the Agreement.  Further, 
Attorney Durkin did not send a letter or other acknowledgment 
No.  2004AP1359.jpw 
 
2 
 
accepting or declining the purported assignment contained in the 
Agreement.   
¶46 Prior 
to 
Hernandez's 
settlement, 
Attorney 
Durkin 
contacted Dr. Yorgan to ask if he would reduce his fee; Dr. 
Yorgan refused.  Subsequent to this conversation and with the 
knowledge that Dr. Yorgan was expecting payment from the 
proceeds, Attorney Durkin disbursed the funds, less attorney's 
fees, to Hernandez.  Dr. Yorgan never received any payment. 
¶47 In my view, a better rule would be that in cases such 
as this, when an attorney has actual notice of a purported 
assignment between a client and a medical provider, yet still 
chooses to release the assigned settlement funds without 
notifying the health care provider, the attorney may be held 
liable.  Other jurisdictions have reached a similar conclusion.  
See, e.g., Kaiser Found. Health Plan, Inc. v. Aguiluz, 54 Cal. 
Rptr. 2d 665 (Cal. Ct. App. 1996) overruled on other grounds by 
Snukal v. Flightways Mfg., Inc., 3 P.3d 286 (Cal. 2000); 
Berkowitz v. Haigood, 606 A.2d 1157 (N.J. Super. Ct. Law Div. 
1992) (attorney has the obligation to honor an assignment if 
properly notified).   
¶48 Although I recognize that the Rules of Professional 
Conduct for Attorneys do not provide the basis for civil 
liability, see SCR 20, Preamble, I call attention to them 
because they provide certain ethical guidelines for how an 
attorney should approach a situation such as this when a 
No.  2004AP1359.jpw 
 
3 
 
preexisting agreement purporting to assign settlement proceeds 
is discovered by the attorney.1   
(1) Notice and disbursement.  Upon receiving funds or 
other property in which a client has an interest, or 
in which the lawyer has received notice that a 3rd 
party has an interest identified by a lien, court 
order, 
judgment, 
or 
contract, 
the 
lawyer 
shall 
promptly notify the client or 3rd party in writing.  
Except as stated in this rule or otherwise permitted 
by law or by agreement with the client, the lawyer 
shall promptly deliver to the client or 3rd party any 
funds or other property that the client or 3rd party 
is entitled to receive.   
 . . . . 
(3) Disputes regarding trust property.  When the 
lawyer and another person or the client and another 
person claim ownership interest in trust property 
identified by a lien, court order, judgment, or 
contract, the lawyer shall hold that property in trust 
until there is an accounting and severance of the 
interests.  If a dispute arises regarding the division 
of the property, the lawyer shall hold the disputed 
portion in trust until the dispute is resolved. . . .  
SCR 20:1.15(d)(1), (3) (2006) (third emphasis added).   
¶49 The 
Comment 
to 
this 
Rule 
further 
explains 
the 
following: 
Third parties, such as a client's creditors, may 
have just claims against funds or other property in a 
lawyer's custody.  A lawyer may have a duty under 
applicable law, including SCR 20:1.15(d), to protect 
such 3rd-party claims against wrongful interference by 
the client, and accordingly, may refuse to surrender 
the property to the client.  However, a lawyer should 
                                                 
1 I cite to the 2006 version of Supreme Court Rule 20:1.15, 
which has been modified since the underlying transaction in this 
case.  Attorney Durkin cannot be held to the higher ethical 
standards of these modified rules and did not violate the 
ethical rules in force at the time of the transaction. 
No.  2004AP1359.jpw 
 
4 
 
not unilaterally assume to arbitrate a dispute between 
the client and the 3rd party. 
If a lawyer holds property belonging to one 
person and a second person has a contractual or 
similar claim against that person but does not claim 
to own the property or have a security interest in it, 
the lawyer is free to deliver the property to the 
person to whom it belongs.   
Comment, SCR 20:1.15(d) (2006) (emphasis added). 
¶50 The Rules suggest that when an attorney knows a third 
party claims an interest in future settlement proceeds which the 
client has agreed to, the best course of action is to hold the 
money in trust until the matter can be resolved through a proper 
procedure.   
¶51 In order to avoid situations such as the one Attorney 
Durkin found himself in this case, it seems appropriate that 
attorneys should not remain silent in the face of a written 
demand for the assurances of payment.  The attorney should 
unambiguously notify the health care provider whether he or she 
intends to be bound to the agreement.   
¶52 I am not suggesting that attorneys have a duty to 
investigate the financial affairs of their clients prior to 
releasing settlement funds.  I am merely suggesting that when an 
attorney has actual notice of a purported assignment of 
settlement proceeds, as in this case, he or she should take the 
proper precautionary steps suggested by the ethics rules before 
releasing the funds.  Such a rule would help prevent the unjust 
result of this case. 
 
No.  2004AP1359.pdr 
 
1 
 
¶53 PATIENCE DRAKE ROGGENSACK, J. (dissenting).   Because 
the need for medical care arose out of the same accident as did 
the settlement proceeds and there is no evidence in the record 
that Sol Hernandez (Hernandez) provided Attorney Durkin (Durkin) 
any instructions about the disbursement of the settlement 
proceeds to Doctor Yorgan (Yorgan) that were contrary to the 
assignment she executed in favor of Yorgan, I conclude that 
Hernandez validly assigned to Yorgan settlement proceeds from 
her personal injury claim, up to the amount of the charges for 
the chiropractic treatments Yorgan provided to Hernandez.  I 
also conclude that Hernandez granted Yorgan a lien to secure 
payment of the debt for which the assignment was made, and that 
the lien can be enforced against the settlement proceeds because 
Yorgan's lien existed before Durkin had any right to retain a 
portion of the proceeds and Durkin had knowledge of both the 
assignment and Yorgan's lien.  Accordingly, I would permit 
Yorgan to recover from Durkin to the extent of the settlement 
proceeds Durkin received or the amount due to Yorgan for the 
chiropractic care he provided to Hernandez, whichever is 
smaller. 
¶54 I also conclude that the analysis of the majority 
opinion, which focuses on whether Durkin entered into a contract 
to pay Yorgan,1 misperceives the issue that is dispositive of 
this case.  The analysis chosen by the majority opinion causes 
it to ignore the validity of Hernandez's assignment to Yorgan 
                                                 
1 See majority op., ¶2. 
No.  2004AP1359.pdr 
 
2 
 
and the effect of the lien Hernandez gave on the settlement 
proceeds Durkin received.  Therefore, I respectfully dissent. 
I.  DISCUSSION 
A. 
Standard of Review 
¶55 Whether one has validly assigned an interest in 
property is a question of contract interpretation subject to our 
independent review.  Edwards v. Petrone, 160 Wis. 2d 255, 258, 
465 N.W.2d 847 (Ct. App. 1990).  Whether a lien has attached to 
property is also reviewed independently.  See McIntyre v. Cox, 
68 Wis. 2d 597, 602, 229 N.W.2d 613 (1975).   
B. 
Assignments 
¶56 On December 15, 1999, Hernandez made a plain and 
unambiguous written assignment2 to Yorgan of proceeds that may be 
received from her personal injury claim: 
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.   
¶57 Moreover, the circuit court found that this document 
was sent to Durkin about November 1, 2000, when Yorgan's office 
transmitted Hernandez's treatment records that 
Durkin had 
requested.  The circuit court also found that Durkin settled 
Hernandez's personal injury claim about June, 2003 and that 
prior to reaching a settlement, Durkin contacted Yorgan to see 
if he would reduce the amount then due for chiropractic 
services.  When Yorgan refused to do so, Durkin paid himself 
                                                 
2 Durkin does not contend that the assignment is ambiguous. 
No.  2004AP1359.pdr 
 
3 
 
from the settlement proceeds and sent the rest of it to 
Hernandez, who is now nowhere to be found.  There is no evidence 
in the record that Hernandez provided Durkin any instructions 
about the disbursement of the settlement proceeds to Yorgan that 
were contrary to the assignment she executed in favor of Yorgan.  
Accordingly, Durkin had notice of this assignment, expressly 
created by his client.  
¶58 An assignment of an interest in the settlement 
proceeds from a personal injury claim may be made by a written 
contract.  Riegleman v. Krieg, 2004 WI App 85, ¶25, 271 Wis. 2d 
798, 679 N.W.2d 857.  Unless there is some statutory or common 
law prohibition, the terms of the assignment control its effect.  
See id.  When the terms are plain and unambiguous, we construe 
an assignment according to its plain meaning.  See Waukesha 
Concrete Prods. Co. v. Capitol Indem. Corp., 127 Wis. 2d 332, 
339, 379 N.W.2d 333 (Ct. App. 1985).  
¶59 I have located 
no 
statutory prohibition against 
assigning an interest in the settlement proceeds from a personal 
injury claim, and Durkin does not claim such a prohibition 
exists.  In regard to whether there is a common law prohibition 
against such assignments, while Riegleman held that such an 
assignment was created, it did not directly address whether the 
common law affected its decision.  The majority opinion ducks 
the issue by claiming that the dissent improperly considers the 
validity of Hernandez's assignment in favor of Yorgan.  Majority 
op., ¶13.  It asserts that the circuit court did not address an 
assignment to Yorgan.  Id.  While the circuit court did not 
No.  2004AP1359.pdr 
 
4 
 
overtly analyze the elements of an assignment, it concluded that 
Hernandez did assign settlement proceeds to Yorgan when it said: 
The Court also holds that Mr. Durkin was bound by 
the terms of the direction given to him by Mr. [sic] 
Hernandez; that is, to pay Dr. Yorgan's bill.  . . .  
[T]his Court is satisfied that Dr. Yorgan and Mr. 
[sic] Hernandez gave actual notice to Mr. Durkin of 
Dr. Yorgan's interest in the settlement of the 
proceeds. 
Racine County Circuit Court Decision, Case No. 2003SC5353, p. 3. 
¶60 The majority opinion also takes the dissent to task 
for analyzing whether Hernandez made an assignment to Yorgan 
because Yorgan, who appeared pro se, did not brief the issue.  
The majority opinion asserts: 
The proper procedure is to have an issue raised, 
briefed, and argued by the parties before deciding it.  
Nevertheless, the dissent reaches out and addresses 
this issue.  . . .  Unlike the dissent, we think that 
before 
this 
court 
confronts 
the 
issue 
of 
the 
assignability of a tort claim (or its anticipated 
proceeds) in such a novel manner, the issue should be 
presented in the case and tested by adversarial briefs 
of the parties. 
Majority op., ¶13 n.4.  However, the majority opinion overlooks 
Yorgan's brief.  Yorgan contends that Hernandez assigned him 
sufficient proceeds from the future settlement of her personal 
injury claim to cover the cost of the medical care Yorgan 
provided as a result of the personal injuries Hernandez 
sustained.  See Yorgan's brief in chief, pp. 8-13; 17-19.  In 
addition, the amicus addressed Hernandez's assignment of the 
settlement 
proceeds 
sufficient 
to 
pay 
Yorgan 
for 
the 
chiropractic services he rendered as a result of the accident:   
Once 
Ms. 
Hernandez 
assigned 
a 
portion 
of 
her 
settlement proceeds to Dr. Yorgan, Ms. Hernandez had 
No.  2004AP1359.pdr 
 
5 
 
no further interest in that portion of the settlement.  
Thus, Attorney Durkin, who received notice of the 
assignment and had no reasonable basis to doubt its 
validity, was obliged to pay to Dr. Yorgan that 
portion of the settlement proceeds that were the 
subject of Ms. Hernandez's assignment. 
Brief of Amicus Curiae Wisconsin Chiropractic Association, p. 
17.  Therefore, the issue of Hernandez's assignment was 
presented to this court in the course of our review.  
¶61 Although 
my 
research 
has 
located 
no 
Wisconsin 
appellate case that directly addressed the issue of whether one 
who has a claim for personal injuries can assign proceeds from 
that claim under the common law of Wisconsin, courts from other 
jurisdictions that have examined this issue have recognized the 
assignability 
of litigation 
proceeds 
under 
an 
appropriate 
agreement.  They have distinguished between an older prohibition 
against assigning a claim for personal injury from the modern 
policy of permitting the assignment of proceeds from such causes 
of action.  See, e.g., In re Mucelli, 21 B.R. 601, 603-04 
(Bankr. S.D.N.Y. 1982) (holding that while a personal injury 
claim was not assignable and therefore was exempt property, the 
proceeds of that claim could be assigned and as such were not 
exempt); In re Musser, 24 B.R. 913, 919 (Bankr. W.D. Va. 1982) 
(holding that patients' assignments to medical providers of 
settlement or insurance payments to be received in the future 
were equitable assignments); Ala. Farm Bureau Mut. Cas. Ins. Co. 
v. Anderson, 
263 
So.2d 
149, 
154 
(Ala. Civ. App. 
1972) 
(concluding that a subrogation clause requiring reimbursement 
from the proceeds of a personal injury claim to the insurer for 
health care payments it made was not a prohibited assignment).   
No.  2004AP1359.pdr 
 
6 
 
¶62 In Wisconsin, contrary to the majority rule among our 
sister states, one may be able to assign an entire personal 
injury claim, which includes the proceeds received from the 
claim.3  D'Angelo v. Cornell Paperboard Prods. Co., 19 Wis. 2d 
390, 398, 120 N.W.2d 70 (1963).  D'Angelo involved the 
assignment of a personal injury claim for the payment of 
$120,000 to an injured worker.  Id. at 396-97.  When the 
assignee sued to enforce the assigned personal injury claim, it 
prayed for $300,000 in damages.  Id. at 395.  The defendant 
asserted the assignment was invalid because it was champertous 
and contrary to public policy.  Id.  We disagreed and upheld the 
                                                 
3 The majority opinion implies that by relying on the 
reasoning of D'Angelo v. Cornell Paperboard Prods. Co., 19 
Wis. 2d 390, 120 N.W.2d 70 (1963), the dissent is contending 
that Yorgan should be treated as an insurance company that has a 
contractually based subrogation right.  Majority op., ¶13 n.4.  
The majority contends that if that is the case, a hearing under 
Rimes v. State Farm Mutual Automobile Insurance Co., 106 Wis. 2d 
263, 316 N.W.2d 348 (1982) may be necessary to determine whether 
Hernandez has been made whole, before Yorgan can be paid.  
Majority op., ¶13 n.4.   
This contention is without legal foundation because the 
underlying principle of Wisconsin's made whole doctrine is that 
insurance companies are paid to take a risk of going unpaid.  
Therefore, when there is a dispute between an injured party who 
is not fully compensated and an insurance company that is not 
fully compensated, the burden of nonpayment must fall on the 
insurance company that was paid to take that risk.  Rimes, 106 
Wis. 2d at 276 (citing Garrity v. Rural Mut. Ins. Co., 77 
Wis. 2d 537, 542, 253 N.W.2d 512 (1977)).  Yorgan was not paid 
to take the risk of nonpayment.  Furthermore, as I explain 
below, I conclude that Hernandez assigned the proceeds of the 
settlement only to the extent necessary to pay Yorgan for the 
care he provided as a result of the accident that caused the 
need for that same medical care.  To assign proceeds in excess 
of that amount would be contrary to public policy, as explained 
in D'Angelo, 19 Wis. 2d at 397-99. 
No.  2004AP1359.pdr 
 
7 
 
assignment of the claim, but only to the extent of the payment 
that had been made to obtain the assignment.  Id. at 397.  In 
holding the assignment valid to up to $120,000, we relied in 
part on the statutory abrogation of the defense of champerty, 
then found in Wis. Stat. § 331.375 (2003-04),4 now Wis. Stat. 
§ 895.375, id., and on the interest that the assignee had in the 
personal injury lawsuit because of the $120,000 payment it made 
to compensate for the injuries the assignor sustained.  Id. at 
398.  In so limiting the assignment, we tied its validity to its 
connection with the personal injuries that formed the basis for 
the lawsuit that the assignee commenced to realize on the 
assignment.  By limiting the assignment in that manner, we 
concluded that it did not violate public policy.  Id. at 398-99. 
¶63 The reasoning of D'Angelo applies with equal force to 
the assignment of proceeds that Hernandez executed in favor of 
Yorgan.  Hernandez was injured in an accident, but payment from 
those responsible for her injuries was not available immediately 
following the accident, just as was the case in D'Angelo.  
Hernandez needed a way in which to pay for the medical treatment 
she required because of the automobile accident, just as the 
assignor in D'Angelo needed money after his injury.  Yorgan was 
willing to provide immediate treatment, but to forgo immediate 
payment in exchange for an assignment of proceeds from the 
settlement of Hernandez's claim, just as the assignee was in 
D'Angelo.  Furthermore, Yorgan is not requesting more than the 
                                                 
4 All subsequent references to the Wisconsin Statutes are to 
the 2003-04 version unless otherwise indicated. 
No.  2004AP1359.pdr 
 
8 
 
dollar amount of his connection to the accident that formed the 
basis 
of 
Hernandez's 
personal 
injury 
claim 
because 
the 
assignment is capped by the charges for the medical care she 
required as a result of the accident.  In D'Angelo, we confirmed 
the validity of an assignment made for a similar purpose, up to 
the amount of the assignee's connection to the assignor's 
personal injury.  We should do no less here.   
¶64 Upholding Hernandez's assignment of proceeds will 
assist those who are in need of medical care, but are unable to 
pay for it at the time that it is provided.  Wisconsin permits 
assignments of proceeds from personal injury claims, in the 
nature of contingency fee agreements, in order to obtain legal 
services.5  I see no reason why an assignment to obtain 
chiropractic services should be precluded here, as the need for 
the medical care arose out of the same accident as did the need 
for legal services.  Accordingly, I conclude that the plain 
terms of the agreement between Hernandez and Yorgan assigned an 
interest to Yorgan in the proceeds received from Hernandez's 
personal injury claim.  Because the assignment is capped by the 
amount of the charges for the medical care that Hernandez needed 
and received because of the automobile accident that forms the 
basis for the settlement Durkin received, it is neither 
champertous under Wisconsin law, Wis. Stat. § 895.375, nor is it 
against public policy under Wisconsin law.  D'Angelo, 19 Wis. 2d 
at 398-99. 
 
                                                 
5 That is how Durkin paid himself in this case. 
No.  2004AP1359.pdr 
 
9 
 
C. 
Liens 
¶65 Liens can be equitable, see O'Connell v. O'Connell, 
2005 WI App 51, ¶13, 279 Wis. 2d 406, 694 N.W.2d 429, 
contractual, see Yates v. Weinhardt, 224 Wis. 496, 502, 272 N.W. 
347 (1937), or statutory, see, e.g., Wis. Stat. § 757.36.   An 
equitable lien can arise when the following elements are 
present:  (1) "a debt, duty or obligation owing by one person to 
another"; (2) a "res to which that obligation fastens"; and (3) 
a "written contract[] showing an intention to charge some 
particular property with the payment of a debt."  O'Connell, 279 
Wis. 2d 406, ¶13 (quoting McIntyre, 68 Wis. 2d at 602).   
¶66 In O'Connell, a prior owner of land, Gerald, sued to 
recover a greater share of the proceeds from the sale of the 
land than the other owners, Emmett and David, received because 
of additional work Gerald performed, which he claimed increased 
the sale price.  O'Connell, 279 Wis. 2d 406, ¶17.  The defense 
to Gerald's claim was that it should have been brought before 
the property sold.  Id., ¶18.  The court of appeals concluded 
that Gerald's claim for an equitable lien on the proceeds did 
not have to be brought until the sale proceeds were received; 
and therefore, he could seek disproportionate reimbursement from 
the proceeds pursuant to Wis. Stat. § 842.02.  Id.  Under 
Wisconsin law, "an equitable lien relates back to the time it 
was created" by the parties' conduct.  See In re Stoffregen, 206 
B.R. 939, 944 (Bankr. E.D. Wis. 1997).  
¶67 Here, all the elements necessary for an equitable lien 
to attach to the settlement proceeds are present.  First, it is 
No.  2004AP1359.pdr 
 
10 
 
undisputed that Hernandez had a debt to Yorgan for the 
chiropractic services he provided at the time that Hernandez's 
personal injury claim settled.  Second, it is undisputed that 
settlement proceeds were obtained from Hernandez's personal 
injury claim and that the medical care Yorgan provided as a 
result of Hernandez's injury in the accident played a part in 
that settlement.  Third, it is undisputed that Hernandez 
executed a written document that purported to assign her 
interest in the settlement proceeds and to create a lien on 
those proceeds, to the extent of the debt for the chiropractic 
services Yorgan provided.6  Therefore, the only ways in which 
Yorgan would not have an equitable lien that is legally 
enforceable against the settlement proceeds is if the lien 
Hernandez granted to secure payment of the assignment did not 
attach to the settlement proceeds or it was not lawful in 
Wisconsin for some other reason. 
¶68 I begin by examining whether proceeds to be received 
from a personal injury claim can constitute a "res" to which an 
equitable lien can attach.  In Riegleman, the court of appeals 
held that a very similarly stated agreement did not create an 
equitable lien because "there is no evidence that the personal 
benefit [Krieg] derived from the [medical] services provided by 
                                                 
6 The agreement provides: 
I further hereby give [a] 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. 
No.  2004AP1359.pdr 
 
11 
 
[the 
chiropractor] 
enhanced 
the 
value 
of 
the 
insurance 
settlement proceeds."  Riegleman, 271 Wis. 2d 798, ¶25 n.4 
(quoting In re Harris, 50 B.R. 157, 160 (Bankr. E.D. Wis. 
1985)).  The court of appeals' conclusion is erroneous for two 
reasons.  First, the lien in Riegleman was a contractual lien, 
as well as an equitable lien, yet the court ignored that basis 
for enforcement.7  Second, an equitable lien arises under 
Wisconsin law when there is a written contract that demonstrates 
the parties' intent to satisfy a debt from a particular 
property.  McIntyre, 68 Wis. 2d at 602.  Although contribution 
to an increase in value of the asset to which the lien attaches 
can be a rationale for creation of an equitable lien, it is not 
a prerequisite.  O'Connor, 279 Wis. 2d 406, ¶13. 
¶69 A review of McIntyre is helpful to my analysis.  
There, a son and a mother had an agreement that at the time the 
mother sold her property, the son would receive a sum from the 
sale proceeds.  McIntyre, 68 Wis. 2d at 599.  We analyzed 
whether the son had an equitable lien that could be enforced 
against subsequent purchasers.  Id. at 600-03.  We concluded 
that there was no equitable lien because at the time that the 
interest was conveyed, the mother did not owe the son for a debt 
then in existence.  Id. at 602.  Therefore, an element necessary 
to creating an equitable lien was not present, and accordingly, 
there was no enforceable lien.  Id. at 602-03. 
¶70 However, before reaching that conclusion, we discussed 
some of the arguments advanced by the parties.  We concluded 
                                                 
7 I discuss the contractual nature of Yorgan's lien below. 
No.  2004AP1359.pdr 
 
12 
 
that although some liens are controlled by specific statutes 
that detail how lien priorities are to be ordered and how the 
right to pursue them arises, Wisconsin courts have recognized 
that notice of an existing lien given to a third party to whom 
the property is transferred can make that lien enforceable 
against the property after the transfer.  See id. at 600-01; see 
also Carefree Homes, Inc. v. Prod. Credit Ass'n of Madison, 81 
Wis. 2d 541, 551-54, 260 N.W.2d 759 (1978).  
¶71 In my view, the reasoning in Berkowitz v. Haigood, 606 
A.2d 1157, 1159-60 (N.J. Super. Ct. Law Div. 1992),8 is 
persuasive (concluding that where a patient made a clear and 
unequivocal assignment and gave a lien on future litigation 
proceeds to the treating chiropractor, and the attorney had 
knowledge of that lien, the lien was enforceable).9  In 
Berkowitz, the attorney who handled the lawsuit did not sign the 
documents that purported to create an assignment of and a lien 
against 
the 
proceeds 
from 
a 
personal 
injury 
claim.  
Notwithstanding the lack of the attorney's signature, the court 
held the lien valid by using the following principles to analyze 
it:  (1) settlement proceeds and proceeds derived from a 
                                                 
8 The majority opinion begins its discussion with Riegleman 
v. Krieg, 2004 WI App 85, 271 Wis. 2d 798, 679 N.W.2d 857.  
Majority op., ¶¶10-12.  Berkowitz v. Haigood, 606 A.2d 1157 
(N.J. Super. Ct. Law Div. 1992), is the New Jersey case relied 
upon by Riegleman.  However, as noted above, the court of 
appeals did not adequately employ Berkowitz's reasoning. 
9 See also In re Carroll, 89 B.R. 1007, 1009 (Bankr. N.D. 
Ga. 1988) (holding that patient's assignment of, and grant of a 
lien on, proceeds from personal injury claim to treating doctor 
was enforceable). 
No.  2004AP1359.pdr 
 
13 
 
judgment for a personal injury claim are assignable; (2) a valid 
assignment must contain clear evidence of the intent to transfer 
the person's rights and "'the subject matter of the assignment 
must be described sufficiently to make it capable of being 
readily identified'"; (3) "[t]he assignment must be clear and 
unequivocal in order to be effective as to the obligor"; (4) 
"the obligor must be properly notified of the existence of the 
assignment"; and (5) when "notified of the assignment, the 
obligor is charged with the duty to pay the assignee," thereby 
giving effect to the lien on the proceeds.  Berkowitz, 606 A.2d 
at 1159 (quotation and citations omitted).   
¶72 All of the factors identified in Berkowitz are present 
here.  First, the settlement proceeds from Hernandez's claim 
were assignable under Wisconsin law.  Second, the plain wording 
of the contract between Yorgan and Hernandez evinces a clear 
intent to transfer Hernandez's rights in the settlement proceeds 
to the extent of the medical care Yorgan provided.  Third, the 
unambiguous 
language 
of 
the 
assignment 
was 
clear 
and 
unequivocal.  Fourth, Durkin was properly notified of the 
existence of the assignment and the lien through the copy of the 
contract he was provided more than two years before he settled 
Hernandez's lawsuit.  Fifth, once notified of the assignment and 
lien, Durkin became an obligor with respect to his handling of 
the settlement proceeds. 
¶73 In my view Yorgan also had a contractual lien.  The 
contractual lien given here is little different from the lien 
one gives to a bank in the form of a mortgage in exchange for 
No.  2004AP1359.pdr 
 
14 
 
money to purchase a home.10  What is necessary is offer, 
acceptance, consideration and a clear intent to place a lien on 
a particular property.  Yates, 224 Wis. at 500-02.  On its face, 
the 
contract 
between 
Hernandez 
and 
Yorgan 
satisfies 
the 
requirements necessary to creating a contractual lien.  Also, 
Durkin does not claim that any of the elements necessary to 
creation of a contractual lien are missing here, nor does he 
assert that he did not have notice of the lien.  Accordingly, 
under either the theory of an equitable lien or the theory that 
Yorgan had a contractual lien, Yorgan had a lien against the 
settlement proceeds that Durkin received.   
¶74 Durkin was not free to deal with the settlement 
proceeds as though no lien existed.  According to these facts, 
Yorgan had the right to enforce the lien against the settlement 
proceeds before Hernandez or Durkin was paid from them.  See 
Stoffregen, 206 B.R. at 944.  When Durkin distributed the 
settlement proceeds to himself and to Hernandez, he did what he 
had no lawful right to do.11 
¶75 The majority opinion begins its analysis by looking to 
Riegleman.  It points out a difference between the facts of 
                                                 
10 See Citizens Loan & Trust Co. v. Witte, 110 Wis. 545, 
545-46, 86 N.W. 173 (1901) (concluding that a mortgagee had a 
claim to foreclose the lien created by a mortgage on a property 
that was sold by the mortgagor, even though the property was no 
longer in the possession of the mortgagor). 
11 In Riegleman, the court of appeals clearly instructed 
that when there is a dispute as to how settlement proceeds are 
to be distributed, the better choice is to seek declaratory 
judgment from the circuit court.  Riegleman, 271 Wis. 2d 798, 
¶36.  Durkin ignored this wise advice at his peril. 
No.  2004AP1359.pdr 
 
15 
 
Riegleman, and those of the case at bar:  in Riegleman, the 
attorney signed the agreement and thereby assented to the terms 
of the agreement.  Majority op., ¶14.  Here, Durkin did not sign 
the agreement between Hernandez and Yorgan.  However, Riegleman 
does not suggest that the signature of an attorney is necessary 
to concluding that an assignment is valid, but rather, it 
applied a basic contracts analysis that first determined whether 
the 
attorney 
was 
a 
party 
to 
the 
contract 
to 
pay 
the 
chiropractor, and then it addressed the obligations that 
followed from its initial conclusion.  Riegleman, 271 Wis. 2d 
798, ¶27.  And, as explained above, Riegleman relied on 
Berkowitz where the assignment was not signed by the attorney.  
Id., ¶28.  However, the focus of this case is not whether Durkin 
contracted to pay Yorgan.  Rather, the case turns on the legal 
sufficiency of Hernandez's contract with Yorgan, which assigned 
him an interest in the settlement proceeds and gave him a lien 
on those proceeds to secure payment for the medical care she 
received.  
¶76 The majority provides three reasons for concluding 
that Yorgan's lien was not enforceable.  I address them in turn.  
The majority first concludes that it is inappropriate to permit 
Yorgan to enforce his lien against Durkin because it was 
Hernandez, and not Durkin, who was unjustly enriched.  Majority 
op., ¶39.  The majority opinion places undue weight on that 
consideration. 
 
As 
we 
have 
shown 
and 
as 
the 
majority 
acknowledges, there is an accepted three-part test that courts 
are to apply to conclude that an equitable lien has been 
No.  2004AP1359.pdr 
 
16 
 
established; unjust enrichment is not required to establish an 
equitable lien.  To the contrary, we have on multiple occasions 
analyzed lien claims and unjust enrichment claims in the same 
case with separate and distinct reasoning.  See Carefree Homes, 
81 Wis. 2d at 545-49; see also Rock River Lumber Corp. v. 
Universal Mortgage Corp. of Wis., 82 Wis. 2d 235, 239-41, 262 
N.W.2d 114 (1978); S&M Rotogravure Serv. v. Baer, 77 Wis. 2d 
454, 461-63, 252 N.W.2d 913 (1977). 
¶77 The 
majority 
also 
concludes 
that 
enforcing 
an 
equitable lien in this matter "would seem to circumvent the 
general rule against attorney non-liability to third parties."  
Majority op., ¶39.  I disagree.  The policy of attorney non-
liability to third parties has nothing to do with whether Yorgan 
has an equitable or contractual lien that is enforceable against 
the 
proceeds 
from 
Hernandez's 
settlement. 
 
The 
majority 
opinion's reliance on this theory is misplaced because allowing 
Yorgan to enforce a lien against the settlement proceeds that 
Durkin received is little different from permitting enforcement 
against settlement proceeds in the hands of an insurance company 
who has notice of an assignment and lien on them.  See 
Associated Hosp. Serv., Inc. v. Milwaukee Auto. Mut. Ins. Co., 
33 Wis. 2d 170, 173-74, 147 N.W.2d 225 (1967) (concluding that a 
contract which provided for repayment of medical expenses paid 
on behalf of an insured, from any recovery obtained from a third 
party, was valid).  In either case, when the holder of the funds 
is on notice of a claim to their ownership, it can pay the funds 
No.  2004AP1359.pdr 
 
17 
 
into court and ask for a declaratory judgment sorting out how 
the proceeds are to be distributed.   
¶78 Finally, the majority explains that the enforcement of 
a lien against the proceeds Durkin received would circumvent the 
legislature's policy choice as reflected in existing statutory 
lien provisions for health care providers, which do not cover 
the situation before us.  Majority op., ¶40.  The majority's 
conclusion is that if the legislature intended a claim like 
Yorgan's to be enforceable under a lien theory, the legislature 
would have drafted a statute that addressed such a claim.  I 
disagree that the legislature's creation of the statutory 
provision that provides for certain liens precludes a broader 
common law or equitable claim.  See Stasey v. Miller, 168 
Wis. 2d 37, 60, 483 N.W.2d 221 (1992) (stating that "[t]his 
court has recognized the existence, independent of statute, of 
common law charging liens that secure an attorney's payment from 
the proceeds of a judgment" (footnote and citations omitted)). 
¶79 As I explained earlier, public policy considerations 
strongly bolster the outcome that I advance.  Yorgan provided 
needed medical care to a patient who was not able to pay for the 
care at the moment when she was most in need of care.  The need 
for medical care arose out of the same accident as did the 
settlement proceeds.  As is the case in most personal injury 
cases, Hernandez did not receive compensation immediately after 
the accident.  This was despite the fact that she chose to 
settle short of trial.  Without the promise to pay Yorgan from 
what she expected to receive from her claim, Hernandez was 
No.  2004AP1359.pdr 
 
18 
 
unable to pay for the care she received.  Furthermore, as the 
majority 
itself 
acknowledges, 
it 
is 
not 
good 
policy 
to 
discourage health care providers from entering into agreements 
with patients for deferred payment.  In a day and age when 
health care is expensive and options for the uninsured are few, 
that is a troubling outcome.  In my view, other public policy 
reasons cited by the majority in support of its decision do not 
outweigh these pressing concerns. 
II.  CONCLUSION 
¶80 Because the need for medical care arose out of the 
same accident as did the settlement proceeds and there is no 
evidence in the record that Hernandez provided Durkin any 
instructions about the disbursement of the settlement proceeds 
to Yorgan that were contrary to the assignment she executed in 
favor of Yorgan, I conclude that Hernandez validly assigned to 
Yorgan settlement proceeds from her personal injury claim, up to 
the amount of the charges for the chiropractic treatments Yorgan 
provided to Hernandez.  I also conclude that Hernandez granted 
Yorgan a lien to secure payment of the debt for which the 
assignment was made, and that the lien can be enforced against 
the settlement proceeds because Yorgan's lien existed before 
Durkin had any right to retain a portion of the proceeds and 
Durkin had knowledge of both the assignment and Yorgan's lien.  
Accordingly, I would permit Yorgan to recover from Durkin to the 
extent of the settlement proceeds Durkin received or the amount 
due to Yorgan for the chiropractic care he provided to 
No.  2004AP1359.pdr 
 
19 
 
Hernandez, whichever is smaller.  Therefore, I respectfully 
dissent. 
¶81 I am authorized to state that Justice LOUIS B. BUTLER, 
JR. joins this dissent. 
 
 
No.  2004AP1359.pdr 
 
 
 
1