Opinion ID: 2598937
Heading Depth: 1
Heading Rank: 10

Heading: Sarman's statements regarding incidental jurisdiction constitute dicta and are, nevertheless, overbroad

Text: Dicta is not controlling. Kaldi v. Farmers Ins. Exch., 117 Nev. 273, 282, 21 P.3d 16, 22 (2001). A statement in a case is dictum when it is unnecessary to a determination of the questions involved. See St. James Village, Inc. v. Cunningham, 125 Nev. ___, ___, 210 P.3d 190, 193 (2009) (quoting Stanley v. Levy & Zentner Co., 60 Nev. 432, 448, 112 P.2d 1047, 1054 (1941)). Because the attorney in Sarman had a retaining lien, and the client consented to the district court's adjudication of the fee dispute in that case, it was unnecessary for the Sarman court to consider whether the district court had jurisdiction to resolve an attorney-client fee dispute in a pending action regardless of whether the client sought to extinguish the attorney's retaining lien. As such, we conclude that the statements concerning a court's incidental jurisdiction to resolve an attorney-client fee dispute in a pending matter when the client is moving the court to resolve a retaining lien are not binding, as they constitute dicta. As previously noted, a district court has jurisdiction to resolve a fee dispute based on a retaining lien when the client consents, as were the facts in Sarman. To the extent that the Sarman court held that a court has incidental jurisdiction to resolve an attorney-client fee dispute regardless of whether a valid lien existed, we conclude that the Sarman opinion is overbroad. Specifically, in stating that a district court has power to resolve fee disputes in the underlying action irrespective of whether the attorney sought to enforce a lien, the Sarman court relied, in part, on Gordon v. Stewart, 74 Nev. 115, 116, 324 P.2d 234, 235 (1958). In Gordon, the attorney had neither a charging or retaining lien against the client. Rather, the withdrawing attorneys simply asked the court to fix the compensation due them for services performed prior to their withdrawal, which, according to the Sarman court, indicated that a court's power to resolve an attorney-client fee dispute is unrelated to the nature of the lien sought to be enforced, so that the court could adjudicate the fee dispute regardless of whether the attorney sought adjudication of a lien or not. Sarman, 80 Nev. at 540, 396 P.2d at 849. In reviewing the Gordon opinion, however, like the Sarman court, the Gordon court conflated statements made in Earl v. Las Vegas Auto Parts, 73 Nev. 58, 307 P.2d 781 (1957), and improperly extended the Earl court's holding. See Gordon, 74 Nev. at 116, 324 P.2d at 235. In Gordon, the attorneys, on behalf of the client, filed counterclaims against the plaintiffs. Id. The attorneys and the client agreed that the attorneys would receive a contingency fee from the damages recovered by the counterclaim. Id. Thereafter, the attorneys withdrew as counsel for the client. Id. As a result, the attorneys had neither a charging nor a retaining lien. Nonetheless, the attorneys moved the district court to fix their compensation based on quantum meruit principles. Id. The client consented to the district court's jurisdiction to ascertain the reasonable value of the fees sought by the attorneys. Consequently, the district court fixed the attorney's compensation. Id. On appeal, the Gordon court affirmed the fee award, in part, on the basis that the district court had incidental jurisdiction to adjudicate the attorney-client fee dispute in the action in which the attorney's services were rendered . . . relative to the establishment of an attorney's lien. 74 Nev. at 118, 324 P.2d at 236. In reaching this conclusion, the Gordon court relied on statements made by the Earl court. The Earl court was asked to consider the district court's jurisdiction to resolve a fee dispute that arose from an attorney's charging lien and affirmed the district court's adjudication of a fee dispute that arose from a charging lien. Earl, 73 Nev. at 60, 307 P.2d at 781-82. The Earl court specifically held that a court's power to enforce or determine the validity of the attorney's claimed lien in the pending action was due to the court's personal jurisdiction over the parties and subject matter jurisdiction of the charging lien. Id. at 62-64, 307 P.2d at 783. As stated previously, a district court may enter judgment against a person or entity if the court has personal and subject matter jurisdiction over the parties and matter in dispute. C.H.A. Venture v. G.C. Wallace Consulting, 106 Nev. 381, 383, 794 P.2d 707, 708 (1990). In Earl, the district court had personal jurisdiction over the parties to the fee dispute, and because a district court obtains in rem jurisdiction to adjudicate a charging lien, the district court had jurisdiction to extinguish the charging lien. Thus, in Earl, the district court had incidental jurisdiction to resolve the attorney's charging lien in the action in which the attorney's services were rendered. Gordon, however, did not involve a charging lien. And the attorney in that case voluntarily withdrew, compared to the Earl attorney who was discharged by the client; furthermore, the Gordon client consented to the district court's adjudication of the fee dispute. Because of these factual distinctions, we conclude that the Gordon court improperly extended the Earl court's holding. Hence, we reject Sarman and Gordon to the extent that those opinions indicate that the district court has the power to resolve a fee dispute in the underlying action irrespective of whether the attorney sought adjudication of a lien. We also note that Gordon and Earl are inapposite to Sarman because Gordon did not involve an attorney seeking to enforce any type of lien and Earl involved a charging lien, whereas Sarman involved a retaining lien. Because the Sarman court's statements indicating that district courts have incidental jurisdiction to adjudicate fee disputes in the underlying action and that the court has power to do so irrespective of the type of attorney's lien at issue and whether the attorney sought to enforce a lien at all constitute dicta and are overbroad, we limit or reject those statements to the extent that they are contrary to our holding in this opinion. We reiterate that the district court has jurisdiction to adjudicate a fee dispute in the underlying action upon the existence of an enforceable charging lien or the client's request or consent to the court's adjudication of a retaining lien.