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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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Umred St.a - VJIJff of Appeals 

Tenth Circuit 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

NOV 2 9 1990 

WOODS PETROLEUM CORPORATION; RAYTEX ) 

RESOURCES INCORPORATED; MIDCON CENTRAL ) 

EXPLORATION COMPANY; MUSTANG PRODUCTION) 

COMPANY, ) 

Plaintiffs, 

v. 

DEPARTMENT OF INTERIOR, 

Defendant-Appellee, 

and 

BUREAU OF INDIAN AFFAIRS; TIMOTHY NIBS; 

WISDOM A. NIBS, JR.; REGINALD R. NIBS; 

RONALD LEROY NIBS; ELAINE SHIRLEY NIBS 

MAYES; D'ANN NIBS; LOWELL NIBS; 

THEODORE RAYMOND NIBS; WISDOM A. 

NIBS, SR.; BRENDA TONIPS NIBS; MICHAEL 

NIBS; LEROY STONEROAD; VICTOR STONEROAD; SOLOMON STONEROAD; ELEANOR JOY 

STONEROAD; JOE HICKS; ANNA B. TWINS 

SPOTTEDWOLF; PATRICK B. SPOTTEDWOLF; 

LUCIAN M. TWINS; JOYCE M. TWINS; MINITA 

TWINS RUNNINGWATER; WESLEY ROBERT 

TWINS; LUCINDA AMELIA SWEETWATER; 

MARIAM MANN TWINS; MCCLAIN H. TWINS; 

MARION M. TWINS; MICHAEL WAYNE TWINS; 

TOMLINSON PROPERTIES, INC., 

Defendants, 

AMOS E. BLACK, III, 

Movant-Appellant. 

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ROBERT L. l-IOECKER 

Clerk 

No. 89-6106 

(No. CIV-86-1623-A) 

(W.D. Okla.) 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 1 
ORDER AND JUDGMENT* 

Before BALDOCK, BARRETT, and EBEL, Circuit Judges. 

Appellant Amos E. Black, III appeals from the district 

court's denial of his motion to impose an attorney's charging lien 

on funds held in escrow by the district court and by the United 

States Department of Interior. We affirm. 

Background 

This appeal arises out of an action brought by Woods 

Petroleum Corporation, Ratex Resources Inc., Midcon Central 

Exploration Company and Mustang Production Company (collectively 

Woods) against appellee U.S. Department of Interior and Bureau of 

Indian Affairs (collectively Interior), Tomlinson Properties, 

Inc., and twenty-eight co-owners and oil and gas lessors 

(Allottees) of undivided fractional interests in the Walking Woman 

and Medicine Woman allotments (Allotments) in Oklahoma. Both 

Woods and Tomlinson claimed to hold valid oil and gas leases to 

the Allotments that had been issued by the Allottees and approved 

by Interior. After an administrative proceeding allegedly 

initiated by some or all of the Allottees, Interior's Assistant 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

2 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 2 
Secretary for Indian Affairs determined that Woods' leases had 

expired, leaving Tomlinson with the only valid oil and gas leases 

for the Allotments. Woods then brought this action against 

Interior and the Allottees, challenging the Assistant Secretary's 

determination and seeking the release of production and royalty 

revenues that had accumulated in Interior's escrow accounts during 

the administrative proceeding. At the same time, Woods received 

the district court's permission to deposit in the registry of the 

court additional sums representing payment for the Allottee's 

royalty interests in oil and gas production occurring on the 

Allotments during the pendency of this action. 

Appellant Black represented all or some of the Allottees in 

the administrative proceedings and in the present action. On 

October 31, 1986, he and up to twenty-four of the Allottees 

executed a contract in which Black agreed "to prosecute and defend 

all claims, rights, and title of the [signatory Allottees] ... 

to the escrowed Royalty payments and any other claim or right that 

might be effected by" this judicial action. 1 In return, the 

signatory Allottees agreed to pay Black twenty percent of the 

royalties held in escrow by Interior or otherwise "due and owing" 

to the Allottees under the disputed Woods and Tomlinson leases. 

As part of his representation of the signatory Allottees in 

this action, Black filed an answer which included a "counterclaim" 

for delivery to the Allottees of all escrowed royalty payments 

1 The contract makes no reference to Black's prior services for 

the Allottees in the administrative proceeding. 

3 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 3 
being held by Interior and the district court and for an 

accounting by Woods of all production from the Allotments during 

the administrative and judicial proceedings. Black's answer did 

not assert any other "claims" against Woods or any other party. 

The district court ultimately entered partial summary 

judgment against Woods, holding that its leases to the Allotments 

had expired. The district court later held that the Allottees 

were entitled to the royalty monies deposited with Interior and 

the district court during the administrative 

proceedings. 

and judicial 

Sometime before the district court ordered the distribution 

of the escrowed royalty monies, all but two of the Allottees 

dismissed Black as their attorney. Black responded by petitioning 

the district court to impose an attorney's charging lien on 

twenty percent of the royalty funds held by it and Interior. The 

district court denied this request, leading Interior to distribute 

the escrowed royalty monies under its control to the Allottees. 

Black then moved for reconsideration of the district court's 

denial of his lien request and amended that request to attach the 

royalty monies escrowed in the court's registry for the full 

amount allegedly due him under the retainer agreement. The 

district court again denied his motion and this appeal timely 

followed. 2 

2 The disputed royalty monies remain on deposit in the district 

court registry. 

4 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 4 
Discussion 

Black claims that Okla. Stat. tit. 5, § 6 (1981 & Supp. 1984) 

required the district court to impose a lien to enforce his 

retainer contract. In the alternative, Black argues that the 

court should have imposed an equitable lien on the escrowed funds 

because the retainer agreement constituted an equitable assignment 

to him of twenty percent of these funds and because this result is 

compelled by general rules of equity. Interior challenges both of 

these claims. 

A. Oklahoma's attorney lien statute3 

Okla. Stat. tit. 5, § 6 provides: 

From the commencement of an action, or from the 

filing of an answer containing a counterclaim, the 

attorney who represents the party in whose behalf such 

pleading is filed shall, to the extent hereinafter 

specified, have a lien upon his client's cause of action 

or counterclaim, and same shall attach to any verdict, 

report, decision, finding or judgment in his client's 

favor; and the proceeds thereof, wherever found, shall 

be subject to such lien .. 

The Oklahoma courts have consistently interpreted this 

provision to permit imposition of a lien only in actions in which 

the attorney sought and obtained affirmative relief for his or her 

client. See, e.g., Levi v. City of Okla. City, 179 P.2d 465, 

469-70 (Okla. 1947); Bruce v. Calloway, 46 P.2d 446, 446-47 (Okla. 

1935); Holloway v. Wright, 215 P. 937, 938 (Okla. 1923). In 

Elliot v. Orton, 171 P. 1110 (Okla. 1918), the Supreme Court of 

3 The district court's decision regarding 

statute is a conclusion of law subject 

appeal. See Heins v. Ruti-Sweetwater, Inc. 

Inc.), 836 F.2d 1263, 1266 (10th Cir. 1988). 

5 

application of this 

to de novo review on 

(In re Sweetwater, 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 5 
Oklahoma held that such affirmative relief does not include 

protection of existing property interests: 

[I]n order for the lien to become effective ... there 

must be affirmative relief in favor of his client. 

any services which he may render that merely protect his 

client in the possession and right to his property are 

not covered by the attorney's lien law. In other words, 

the attorney has no lien upon the res of the action, but 

only upon any affirmative judgment rendered in his 

client's favor. 

Id. at 1113. Accord Adcock v. Bennett, 235 P. 229, 230 (Okla. 

1925)("[A]n attorney representing a defendant has no lien upon the 

subject-matter of the litigation where the answer contains nothing 

by defensive matter and involves no affirmative relief in behalf 

of defendant against the adverse party."). 

Black's efforts before the district court did not seek or 

result in affirmative relief for the Allottees under this 

standard. The thrust of Black's alleged "counterclaim" in this 

action was for the return of the Allottees' escrowed royalty 

monies. It is apparently undisputed, however, that absent the 

Woods suit, the Allottees would have received the disputed royalty 

funds. By his representation of the Allottees in this action, 

therefore, Black was acting "to protect his client[s] in the 

possession and right to [their] property," Elliot, 

171 P. at 1113, rather than to obtain affirmative relief in their 

favor. 4 As a result, Okla. Stat. tit. 5, § 6 does not permit 

4 Black also argues that his request for an accounting of 

production from the Allotments satisfied the statute's requirement 

concerning affirmative relief. Even if this were so, there is no 

evidence in the record on appeal that the district court ever 

ordered such an accounting. Thus, Black has not achieved a 

"verdict, report, decision, finding, or judgment in his client's 

favor" on this issue and may not rely on it to justify imposition 

(continued on next page) 

6 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 6 
Black to impose an attorney's lien on royalty monies held in 

escrow for the Allottees. 5 

United States ex rel. Warren v. Ickes, 73 F.2d 844 (D.C. Cir. 

1934), and Campanella v. Mason, 571 P.2d 449 (Okla. 1977), do not, 

as Black claims, compel a different result. In Campanella, the 

Oklahoma Supreme Court considered whether an attorney's lien could 

attach under the statute to property rights acquired by the party 

who initiated a divorce proceeding. Id. at 451-52. The court 

held that a lien could properly attach through these circumstances 

because the division of property in a divorce proceeding creates 

new and distinct rights, thus providing the party with the 

affirmative relief necessary to support a lien under the statute. 

Id. In Warren, the D.C. Circuit similarly "observed" in dictum 

that property acquired as a result of a successful probate 

petition would be subject to a lien under the Oklahoma attorney's 

lien statute. 73 F.2d at 848. Thus, as in Campanella, the 

(continued from previous page) 

of a lien on the escrowed royalty funds. See Okla. Stat. tit. 5, 

§ 6. 

5 Black also argues in his reply brief that the district 

court's decision that the Allottees were entitled to working 

interest revenues for a portion of the Allotments' production 

constituted an affirmative judgment justifying imposition of an 

attorney's charging lien under the statute. This decision, 

however, was apparently a by-product of the court's determination 

of the rights of Woods and Tomlinson under their Allotment leases 

and not of any claims made by Black on behalf of his clients. In 

addition, Black's retainer agreement only provides for Black to 

receive a percentage of "total Royalties," not of other funds that 

the Allottees might receive as a result of this action. Under 

these circumstances, the award of working interest revenue to the 

Allottees did not entitle Black to impose a lien on these funds 

for fees allegedly due him under the retainer agreement. 

7 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 7 
litigation initiated by the attorney seeking the lien had resulted 

in the client's acquisition of new property rights. In this case, 

Black's efforts did not yield any such new and distinctive 

property rights for his clients. Accordingly, we agree with the 

district court that Okla. Stat. tit. 5, § 6 does not authorize 

imposition of an attorney's lien in this case. 

B. Equitable lien 

Black next argues that the district court should have imposed 

an equitable lien on the escrowed royalty monies because his 

retainer agreement with the signatory Allottees constituted an 

equitable assignment to him of twenty percent of their proportion 

of these funds. Black also claims that he is entitled to impose 

such a lien under the "general rule in courts of equity that a 

trust fund which has been recovered or preserved through their 

intervention may be charged with costs and expenses, including 

reasonable attorney's fees, incurred in that behalf." United 

States v. Equitable Trust Co., 283 U.S. 738, 744 (1931). 

Oklahoma law recognizes that a retainer agreement may in some 

circumstances constitute an equitable assignment of funds or 

property referenced in the agreement and give rise to an equitable 

lien on these funds. See Correll v. Holt, 132 P.2d 953, 956 

(Okla. 1942); Lashley v. Moore, 240 P. 704, 706-07 (Okla. 1925). 

An attorney's right to impose a lien against a client's property 

under this rule exists independent of his right to impose a lien 

under Okla. Stat. tit. 5, § 6. Callahan v. Cowley & Riddle, 

245 P. 48, 49-50 (Okla. 1926); Lashley, 240 P. at 707. 

8 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 8 
The royalty payments now held in the district court's 

registry are "money accruing from [a] lease or sale of lands held 

in trust by the United States" for the Allottees. 6 

25 u.s.c. § 410 (1988). Congress has prohibited payment of such 

funds without the approval and consent of the Secretary of 

Interior: 

No money accruing from any lease or sale of lands held 

in trust by the United States for any Indian shall 

become liable for the payment of any debt of, or claim 

against, such Indian contracted or arising during such 

trust period, or, in case of a minor, during his 

minority, except with the approval and consent of the 

Secretary of the Interior. 

Id. By regulation, the Secretary has given his consent to 

payments out of Indian trust funds only for claims of indebtedness 

brought by the United States or by the Indian beneficiary's tribe, 

for money judgments rendered by the courts of Indian offenses or 

under any tribal law, and for obligations arising out of 

contractual arrangements that were approved in advance by the 

Secretary. See 25 C.F.R. § 115.9 (1990). 

It is undisputed that Black did not obtain the Secretary's 

express consent to his retainer agreement with the signatory 

Allottees 7 and that he has not obtained a money judgment against 

them in tribal court. Interior relies on these facts to argue 

6 Black does not contest that these royalty payments retain 

their status as Indian trust funds, even though presently held by 

the district court, because they would otherwise have been 

deposited in the individual Allottee's trust accounts. 

7 For purposes of this order and judgment only, we assume 

without deciding that the retainer agreement was valid and that 

all of the preconditions for payment of Black's fee have been met. 

9 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 9 
that Black's attempted equitable lien under either an equitable 

assignment or general equitable theory is barred by federal 

statute. Black counters that Interior impliedly consented to the 

retainer agreement when it allowed him to act on the signatory 

Allottees' behalf in the administrative proceeding that preceded 

this action. In the alternative, Black argues that Interior's 

failure to approve the retainer agreement in advance is of no 

effect when an attorney seeks to impose a lien on trust funds 

based on equitable principles. 

We are not persuaded that either of Black's arguments require 

reversal of the district court's decision in this matter. First, 

Interior's alleged recognition of Black as a representative of 

some or all of the Allottees in the prior administrative 

proceedings provides little support to Black's claim that Interior 

consented to a written agreement that was executed after that 

administrative proceeding and by its terms was limited to services 

rendered in this civil action. Even if, as Black claims, this 

written contract merely memorialized a prior oral agreement that 

encompassed Black's services in the administrative proceeding, 

Black has failed to present any evidence that Interior had 

knowledge of this alleged oral agreement and its fee arrangement 

such that its consent to that agreement could be implied. 

On Black's second point, we agree that the federal district 

courts in some circumstances have inherent equitable authority to 

order attorney's fees paid out of Indian trust funds, 

notwithstanding the general statutory restrictions on the federal 

government's disposition of these funds. See, e.g., Equitable 

10 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 10 
Trust Co., 283 U.S. at 745; Arenas v. Preston, 181 F.2d 62, 66-67 

(9th Cir. 1945), cert. denied, 340 U.S. 819 (1950). As stated by 

the Supreme Court in Equitable Trust Co., a case in which an 

Indian's attorney successfully sought payment from such funds for 

services rendered in recovering them after their improper 

disbursement by the United States, these restrictions have no 

application when general equitable principles are invoked to claim 

attorney's fees out of a trust fund that has been "recovered or 

preserved" through the attorney's efforts: 

Without doubt [the restrictions on payments out of 

Indian trust funds] were intended to be comprehensive 

and to afford effective protection to Indian allottees; 

but we find no ground for thinking they were intended to 

restrain courts of equity when dealing with situations 

like that disclosed in this litigation from applying the 

rules which experience has shown to be essential to the 

adequate protection of a wronged cestui que trust. 

283 U.S. at 745. 

The Oklahoma courts, however, have recognized that federal 

regulations governing the alienability and disposal of trust 

property must be satisfied before a retainer agreement may serve 

as an equitable assignment of such property. See Lashley, 240 P. 

at 706; see also Underwood v. Phillips Petroleum Co., 

155 F.2d 372, 374 (10th Cir. 1946)(validity and effect of 

equitable assignment and lien to be determined by the law of the 

state where the chattel was at the time the pledge or lien was 

created). This Oklahoma rule is consistent with Congress' intent 

to protect Indian trust property and funds from dispersal as a 

result of contractual and other arrangements that have not been 

approved by Interior. See 25 U.S.C. § 410. Accordingly, in order 

11 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 11 
to avoid the statutory restrictions on assessing liability against 

the trust funds at issue here, Black must demonstrate his 

entitlement to a lien against these funds under the general rule 

"in courts of equity that a trust fund which has been recovered or 

preserved through their intervention may be charged with costs and 

expenses, including reasonable attorney's fees, incurred in that 

behalf. 118 Equitable Trust Co., 283 U.S. at 744. 

A court exercises its authority under this equitable rule at 

its discretion. 

(10th Cir. 1987). 

See McKinney v. Gannett Co., 817 F.2d 659, 670 

We may not disturb the district court's 

decision on this issue, therefore, absent a showing of abuse of 

discretion. Id. Here, the district court declined to exercise 

its discretion to impose an equitable lien under the general rule 

because the instant "litigation was not initiated by Indian 

landowners and it cannot be said that it was the intervention of a 

court of equity that recovered or preserved a trust fund." Woods 

Petroleum Corp. v. United States Dep't of Interior, 

No. CIV-86-1623-A, slip op. at 7 n.3 (W.D. Okla. Dec. 22, 1988). 

In each of the cases cited by Black in support of his request for 

an equitable lien, the court determined that the attorney 

requesting the lien had initiated the subject litigation in an 

effort to recover some form of affirmative relief for his or her 

8 Because a contractual arrangement may not give rise to an 

equitable lien on Indian trust funds without Interior's approval 

of that arrangement, see Lashley, 240 P. at 706, the Fifth 

Circuit's allowance in Warren of an equitable assignment and lien 

on nontrust Indian property interests, see 73 F.2d at 848, is not 

relevant to this case. 

12 

Appellate Case: 89-6106 Document: 010110093862 Date Filed: 11/29/1990 Page: 12 
client. See Equitable Trust Co., 283 U.S. at 741-44 (recovery of 

client-Indian's trust funds that had been improperly disbursed by 

United States); Arenas, 181 F.2d at 63 (litigation initiated on 

behalf of Indian clients to establish right to an allotment of 

land); Warren, 78 F.2d at 848 (probate petition to have estate 

decreed to client). These cases, therefore, are each consistent 

with the general equitable rule as stated in Equitable Trust Co. 

and are distinguishable from the action presented here. We find 

no abuse of discretion, therefore, in the district court's 

decision not to use its equitable powers to impose a lien on the 

royalty funds at issue in this litigation. 

The judgment of the United States District Court for the 

Western District of Oklahoma is AFFIRMED. 

ENTERED FOR THE COURT 

PER CURIAM 

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