Title: Potter v. Schlesser Co., Inc.
Citation: N/A
Docket Number: S48493
State: Oregon
Issuer: Oregon Supreme Court
Date: February 21, 2003

Filed: February 21, 2003
IN THE SUPREME COURT OF THE STATE OF OREGON

DONALD B. POTTER,
	Petitioner on Review,
	v.
SCHLESSER COMPANY, INC.,
	Respondent on Review.
(TC 9710-08216; CA A105159; SC S48493)

	On review from the Court of Appeals.*
	Argued and submitted September 6, 2002.
	Michael H. Bloom, Portland, argued the cause and filed the
briefs for petitioner on review.
	Michael E. Farnell, of Hagen, Dye, Hirschy &amp; DiLorenzo, PC,
Portland, argued the cause and filed the brief for respondent on
review.
	Richard S. Yugler, Portland, filed a brief on behalf of
amicus curiae Oregon Trial Lawyers Association.
	Before Carson, Chief Justice, and Gillette, Durham, Riggs,
De Muniz, and Balmer, Justices.**
	DE MUNIZ, J.
	The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
	*Appeal from Multnomah County Circuit Court, Nely Johnson, Judge. 171 Or App 646, 17 P3d 529 (2000).
	**Leeson, J., resigned January 31, 2003, and did not
participate in the decision of this case.
		DE MUNIZ, J.
		The issue presented in this case is whether plaintiff, 
an attorney, can enforce an attorney's lien for fees against
defendant when plaintiff's client and defendant settled their
action without plaintiff's knowledge and without satisfying
plaintiff's lien.  The Court of Appeals and the trial court
concluded that plaintiff could not enforce the lien against
defendant.  We disagree and reverse the decision of the Court of
Appeals and the judgment of the trial court. 
		We take the material facts from the Court of Appeals'
opinion:
	"Plaintiff, an attorney, represented George Hunt in an
action for racial discrimination against defendant. 
That action was filed in federal court in December
1996.  In February 1997, Hunt and plaintiff entered
into a retainer agreement entitling plaintiff to one
third 'of all amounts recovered in the event of a
settlement after Complaint is filed and more than 14
days before any scheduled trial or hearing date[.]'  On
September 4, 1997, Steven Schlesser, president of
defendant Schlesser Co., Inc., met privately with Hunt
and entered into an agreement to settle the racial
discrimination action for the sum of $12,000. 
Schlesser made out a check to Hunt in that amount, and
Hunt cashed it that same day.  During their meeting,
Schlesser asked Hunt if he intended to pay plaintiff,
and Hunt responded that his relations with plaintiff
were his business.  Schlesser and Hunt then drafted an additional signed and notarized document
stating that Schlesser had 'expressed his concern to
[Hunt] that he inform his attorney, Don Potter, that he
has settled the case.'  By the following day, plaintiff
apparently had received information about the
settlement and filed in the federal court a 'Notice of
Claim of Attorney's Lien Under ORS 87.445,' asserting
his entitlement to a portion of the settlement proceeds
in accordance with his retainer agreement.
		"In November 1997, plaintiff initiated this action
in state court to enforce his attorney's lien against
defendant Schlesser Co., Inc.  Hunt is not a party to
this action.  Plaintiff asserted that defendant
violated ORS 87.475 by paying Hunt $12,000 in
settlement of Hunt's case against defendant without
first satisfying plaintiff's lien and that plaintiff
suffered damages in the amount of $6,568.86.  Plaintiff
moved for partial summary judgment on his attorney's
lien claim, arguing that his lien was enforceable
against defendant as a matter of law.  Defendant moved
for summary judgment on the same claim, asserting that
any lien plaintiff might have under the attorney's lien
statutes was not enforceable against defendant.  The
trial court denied plaintiff's motion and granted
defendant's motion for summary judgment on plaintiff's
attorney's lien claim, concluding that there is no
statutory authority for enforcement of attorney liens
against third parties when settlement occurs before
judgment."
Potter v. Schlesser Co., Inc., 171 Or App 646, 648-649, 17 P3d
529 (2000) (footnote omitted).  Plaintiff appealed, and the Court
of Appeals affirmed.  Id. at 656.
		On review, plaintiff argues that, because he has an
attorney's lien upon the action that he filed for Hunt against
defendant, he may bring a separate action to satisfy his
attorney's lien against either or both of them.  In response,
defendant contends that plaintiff's lien attaches only to the
"proceeds" that the settlement agreement between defendant and
Hunt generated.  Because the proceeds in this case are now in
Hunt's possession, defendant asserts that plaintiff may not
pursue his lien claim against it.  For the reasons set out below,
we reject that argument.
		To determine the meaning of the attorney lien statutes,
we apply the methodology established in PGE v. Bureau of Labor
and Industries, 317 Or 606, 610-11, 859 P2d 1143 (1993).  Under
PGE, our function is to discern the intent of the legislature. 
To do so, we give statutory terms of common usage their ordinary
meaning and look first to the text and context of the statute as
the best evidence of legislative intent.  317 Or at 611.  If the
intent is clear from the text and context, then no further
analysis is necessary.  Id. 
		We begin with ORS 87.445, which provides:
		"An attorney has a lien upon actions, suits and
proceedings after the commencement thereof, and
judgments, decrees, orders and awards entered therein
in the client's favor and the proceeds thereof to the
extent of fees and compensation specially agreed upon
with the client, or if there is no agreement, for the
reasonable value of the services of the attorney."
	That statute does not define the term "lien."  We
therefore give the word its ordinary meaning.  PGE, 317 Or at
611.  According to its dictionary definition, a "lien" denotes a
"charge upon real or personal property for the satisfaction of
some debt or duty ordinarily arising by operation of law" or "a
right in one to control or to hold and retain or enforce a charge
against the property of another until some claim of the former is
paid or satisfied[.]"  Webster's Third New Int'l Dictionary 1306
(unabridged ed 1993).  Under a similarly worded predecessor
statute, (1) this court defined an attorney's lien, consistent with
the dictionary definition, as an attorney's "equitable right" to
have fees for services and charges for costs advanced "secured by
the judgment or recovery in the suit or action in which the
attorney's services were rendered."  Crawford v. Crane, 204 Or
60, 62, 282 P2d 348 (1955).
		ORS 87.445 thus serves as notice to the world that an
attorney's lien for fees arises when an action is commenced. (2) 
Under the statute, an attorney's lien is a charge on (1) actions,
suits, and proceedings after the commencement thereof; (2)
judgments, decrees, orders, and awards entered therein in the
client's favor; and (3) and the proceeds thereof to the extent of
fees and compensation specially agreed upon with the client.
		We next turn to ORS 87.475, because that statute cross
references the lien created in ORS 87.445.  ORS 87.475 provides:
		"(1) Except as provided in subsections (3) and (4)
of this section, the lien created by ORS 87.445 is not
affected by a settlement between the parties to the
action, suit or proceeding before or after judgment,
decree, order or award.
		"(2) Except as provided in subsections (3) and (4)
of this section, a party to the action, suit or
proceeding, or any other person, does not have the
right to satisfy the lien created by ORS 87.445 or any
judgment, decree, order or award entered in the action,
suit or proceeding until the lien, and claim of the
attorney for fees based thereon, is satisfied in full.
		"(3) A judgment debtor may pay the full amount of
a judgment or decree into court and the clerk of the
court shall thereupon fully satisfy the judgment or
decree on the record and the judgment debtor shall be
thereby released from any further claims thereunder.
		"(4) If more than one attorney appears of record
for a litigant, the satisfaction of the lien created by
ORS 87.445 by any one of the attorneys is conclusive
evidence that the lien is fully satisfied."
(Emphasis added.)  
		The reference in subsection (1) of ORS 87.475 to "the
lien created by ORS 87.445" establishes that an attorney's lien
upon an action remains even after the parties have settled their
legal dispute.  Subsection (2) further protects the attorney's
lien from extinguishment by "a party to the action" or "any other
person" until the "claim of the attorney for fees" underlying the
lien has been paid in full.
		The legislature's intent is clear from the text and
context of the foregoing statutes.  ORS 87.445 and ORS 87.475(1)
and (2) create an attorney's lien for fees incurred in pursuing
an action.  The lien is a charge on the action, and the parties
to the action cannot extinguish or affect the attorney's lien by
any means (such as settlement) other than by satisfying the
underlying claim of the attorney for the fees incurred in
connection with the action.
		Nevertheless, defendant argues that plaintiff's lien
cannot be enforced against it for two reasons.  First, as noted
above, defendant contends that plaintiff's lien "attaches" only
to the proceeds of the settlement paid to Hunt, and because
defendant no longer possesses those proceeds, plaintiff cannot
assert the lien claim against it.  That assertion, however, fails
to acknowledge that, regardless of the alleged settlement between
defendant and Hunt, plaintiff's lien remains a charge on the
action to which defendant is a party.  Because the lien remains a
charge on the action, defendant and Hunt, the parties to the
action, are obligated under ORS 87.475(1) and (2) to satisfy the
attorney's lien to the extent of the action's value. (3)  The
undisputed evidence in the summary judgment record is that the
value of the action is at least $12,000, the amount that
defendant paid to Hunt.  Because the action has value, defendant
as one of the parties to the action, is obligated under the
statutes to satisfy plaintiff's lien to the extent of that value.
		Second, defendant argues that, under the circumstances
here, even if plaintiff has a lien on the action, the legislature
has not provided a statutory means to enforce the lien. 
Defendant is mistaken, however, about the need for statutory
authority to enforce the lien in this instance.  In Crawford, 204
Or at 66-67, the court observed that, under predecessor statutes,
no statutory method had been provided for enforcement of the
attorney's lien.  The court concluded, however, that, in the
absence of statutory direction, the attorney's lien could be
enforced by various methods depending on the "peculiar
circumstances attending the character of the lien."  Id. at 67. 
As noted, as parties to the action encumbered by plaintiff's
lien, defendant and Hunt are statutorily obligated to satisfy the
attorney's lien to the extent of the action's value.  Consistent
with the court's observation in Crawford, we conclude that
plaintiff's separate action against defendant is an acceptable
method to enforce plaintiff's attorney's lien.
		The trial court erred in granting defendant's motion
for summary judgment and in denying plaintiff's motion for
summary judgment on plaintiff's claim to enforce the attorney's
lien against defendant.
		The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.



1. 	The predecessor statute, OCLA 67-1601, provided, in
part:
		"* * *  An attorney has a lien for his
compensation, whether specially agreed upon or implied,
as provided in this section:
		"* * * * *
		"(2) Upon actions, suits and proceedings after the
commencement thereof, and judgments, decrees, orders
and awards entered therein in his client's favor and
the proceeds thereof in whosesoever hands they may be
or come, to the extent of the fees and compensation
specially agreed upon with his client, if there be such
agreement, and if not, for the reasonable value of his
services, and such lien shall not be affected by any
settlement between the parties to the actions, suit or
proceeding before or after judgment, decree, order or
award."

2. 	Unlike the other types of liens available to attorneys,
there is no requirement that a lien upon an action under ORS
87.445 be accompanied by a formal lien notice.  Compare ORS
87.450 to 87.460 (liens against money judgments, judgments for
possession of personal property, and judgments for possession of
real property must be accompanied by lien claim notice filed with
court). 

3. 	In that vein, we note the following statement from the
Court of Appeals of New York, under a similarly worded statute,
sustaining an attorney's lien claim against an adverse party in
the action:
	"[A] lien upon [the] cause of action in favor of
securing to the intestate his lawful compensation arose
at the commencement of the action against the railroad
company. * * * The defendant having knowledge of the
lien may not say that it disregarded it and parted with
the entire fund.  It was bound to retain, and the law
conclusively assumes it has retained, sufficient
[funds] to pay the sum which the plaintiff was entitled
to receive."
Sargent v. New York Cent. &amp; H.R.R. Co., 209 NY 360, 365, 103 NE
164, 166 (1913) (emphasis added).