Opinion ID: 2444758
Heading Depth: 1
Heading Rank: 1

Heading: PASSER v. U.S.F.&G. AND SHIRKEY COUNT I

Text: In this case Passer sought to recover from U.S.F.&G. on the basis that his letter of June 10, 1966, to Charles Gallipeau created a statutory attorney's lien which was applicable to the amount paid by U.S.F.&G. to McClean in satisfaction of her judgment for personal injuries. The answer of U.S. F.&G. admitted receipt by it of said letter but denied that it gave Passer a statutory lien on the money paid by U.S.F.&G. It also pleaded various other defenses, none of which we need consider in view of the disposition we reach. Sections 484.130 and 484.140 relate to compensation of attorneys for representation of clients and to liens therefor. Section 484.130 is a general section which grants a lien from the time of commencement of a suit or counterclaim to cover compensation pursuant to an agreement, express or implied, which is not restrained by law. Section 484.140 is a special statute which is restricted to contingent fee contracts whereby compensation of an attorney is limited to a portion or percentage of recovery and is contingent on successful resolution of the client's claim by either settlement or suit. Passer did not file suit on behalf of McClean and does not assert a claim under § 484.130. We are not concerned with that section in this case. Passer's claim is based on § 484.140 which provides: In all suits in equity and in all actions or proposed actions at law, whether arising ex contractu or ex delicto, it shall be lawful for an attorney at law either before suit or action is brought, or after suit or action is brought, to contract with his client for legal services rendered or to be rendered him for a certain portion or percentage of the proceeds of any settlement of his client's claim or cause of action, either before the institution of suit or action, or at any stage after the institution of suit or action, and upon notice in writing by the attorney who has such agreement with his client, served upon the defendant or defendants, or proposed defendant or defendants, that he has such an agreement with his client, stating therein the interest he has in such claim or cause of action, then said agreement shall operate from the date of the service of said notice as a lien upon the claim or cause of action, and upon the proceeds of any settlement thereof for such attorney's portion or percentage thereof, which the client may have against the defendant or defendants, or proposed defendant or defendants, and cannot be affected by any settlement between the parties either before suit or action is brought, or before or after judgment therein, and any defendant or defendants, or proposed defendant or defendants, who shall, after notice served as herein provided, in any manner, settle any claim, suit, cause of action, or action at law with such attorney's client, before or after litigation instituted thereon, without first procuring the written consent of such attorney, shall be liable to such attorney for such attorney's lien as aforesaid upon the proceeds of such settlement, as per the contract existing as herein provided between such attorney and his client. (Emphasis supplied) Section 484.140 serves two purposes. It authorizes contingent fee contracts whereby an attorney agrees to furnish legal services for a certain portion or percentage of the proceeds of any settlement of his client's claim or cause of action    . Second, it provides that under certain circumstances the service of notice of that contract shall cause the agreement to operate as a lien which shall have the effect spelled out in the section. In providing for such lien the statute states that upon service on defendant or defendants by the attorney of a written notice that he has such an agreement with his client, stating therein the interest he has in such claim or cause of action    the agreement shall operate as a lien. What does this second portion of § 484.140 mean? Does it require, as contended by U.S.F.&G., that the notice specify that the attorney has a contingent fee contract and the percentage or amount of the fee? If so, Passer's letter to Gillipeau of June 10, 1966, was insufficient. It merely stated that he had been retained to represent Miss McClean. Or does it mean, as Passer asserts, that a letter or notice advising that the attorney has been employed is sufficient to comply with § 484.140 and to establish a lien? This is what Passer's letter of June 10, 1966, stated. The briefs on behalf of appellants and respondent cite various cases in support of their respective interpretations of § 484.140. None have dealt specifically with the issue of whether the statute requires that the notice specify that the attorney has a contingent fee contract for a specific percentage or amount of the recovery. Passer's brief recognizes this, saying: There is   no case law to this effect, and the question would appear to be a matter of first impression in this state. We agree. There has been no definitive ruling on this precise question. Several cases have involved factual situations wherein the attorney had given notice which included information as to the terms of his contingent fee contract. These include Wait v. Atchison, T. & S. F. Ry., 204 Mo. 491, 103 S.W. 60 (1907); O'Connor v. St. Louis Transit Co., 198 Mo. 622, 97 S.W. 150 (1906); Brookshire v. Metropolitan Life Insurance Co., 56 S.W.2d 817 (Mo.App.1933); Abbott v. United Rys. Co., 138 Mo.App. 530, 119 S.W. 964 (1909). Hence, these cases did not present for decision the question of whether the notice must include such information. In other cases no notice of any kind was given and the cases were decided on that basis. These include Orr v. Mutual Benefit Health & Accident Association, 240 Mo.App. 236, 207 S.W.2d 511 (1947); Passer v. Berkenmaier, 183 S.W.2d 150 (Mo.App. 1944); Hull v. Phillips, 128 Mo.App. 247, 107 S.W. 21 (1908). It should be noted, however, that in the latter two cases the court indicated in dicta that the notice of lien must give information as to the attorney's percentage. In Passer the court said at 152: If a percentage agreement exists and notice be given as required by said section, then such agreement operates as a lien from the date of the service of such notice. Notice in writing must be given by the attorney that he has such an agreement with his client, stating therein the interest he has in his client's cause of action. In Hull the court said, 107 S.W. at 22: [W]e find the record does not show that such attorney ever notified plaintiff that he had a contract for a certain per cent. of what was recovered, as is required he should do by section 2, Laws 1901, p. 46 [Ann.St.1906, § 4937-2]. In Fein v. Schwartz, 404 S.W.2d 210 (Mo. App.1966), the attorney had a contingent fee contract for 5% of the total received by the property owner for property to be taken by the redevelopment authority. The contention was made that the notice served by the attorney was insufficient because it failed to state the interest in the client's claim or cause of action. It stated that the contract was for a professional fee in a very substantial amount (approximately $15,000). In overruling that contention the court said at 227: While the exact amount found to be due was $14,600, we think the interest as shown in the attorney's lien notice is a sufficient statement of the interest had by attorney and sufficiently complies with the requirements of § 484.140. This case at least inferentially recognized that the statutory notice is to recite the attorney's interest in the claim. In Simpson v. Federal Lead Co., 187 S.W. 1123 (Mo.App.1916), the opinion recited that the attorney had contracted with his client on a contingent fee basis. In considering whether notice sufficient under the statute had been given the court said at 1124: On the following day, to wit, June 17, 1913, plaintiffs wrote a letter to defendant company advising defendant that they represented Pomerko. This letter, however, did not purport to comply with the terms of the statute respecting the written notice required to be given thereunder. The court went on to note that subsequently defendant was furnished a signed copy of the contingent fee contract. This was held to have given defendant sufficient notice under the statute. Again, the court's discussion indicates a recognition that § 484.140 calls for information which informs defendant of the attorney's interest under his contingent fee contract. Since there are no cases resolving this question, we look to the language of the statute for the requirements as to what the notice shall contain. Section 484.140, in speaking of the notice, says that it shall state that he has such an agreement with his client. The preceding portion of the section deals exclusively with contingent fee contracts. Hence, when it then speaks of such agreement, it necessarily refers back to a contingent fee contract discussed and authorized in the preceding language. Thus, the statute says that the notice shall state that the attorney has a contingent fee contract with his client. Next, the section goes on to provide that the notice shall state the interest he has in such claim or cause of action. This obviously calls for something in addition to the statement, already required, that the attorney has a contingent fee contract. That additional something, consisting of the attorney's interest in his client's claim, is the percentage or amount which the contingent fee contract gives him. This is the clear meaning of the language. As previously noted, dicta in several earlier cases has so recognized. This interpretation of § 484.140 is supported by the interpretation the Illinois courts have given their comparable attorney's lien statute, Ill.Ann.Stat. ch. 13, § 14 (Smith-Hurd), which requires attorneys to state in their notice the interest they have in such suits, claims, demands or causes of action. In Mayer v. Yellow Cab Co., 247 Ill.App. 42 (1927), an attorney had a contingent fee contract to pursue a personal injury claim for 1/3 if the suit was settled, and 1/2 if it went to trial. The lien letter stated that he had been hired as an attorney and that he claimed a lien on the cause of action. The court found the notice defective because it did not state the interest which petitioners had in the damage suit in question. Id. at 47. In Cazalet v. Cazalet, 322 Ill.App. 105, 54 N.E.2d 61 (1944), the court declined to pass directly on the sufficiency of the notice because it concluded it was not properly served. However, in dicta the court said: The purported notice contains neither a notice of the amount of the fee contracted for, which is one of the express provisions of the statute, nor of any claim for lien, as provided in and required by said section. 54 N.E.2d at 64. We hold that Passer's letter of June 10, 1966 did not fulfill the requirements of § 484.140 for a notice to defendant of the attorney's lien because it failed to advise that he had a contingent fee contract for 50% of the recovery. Passer suggests that even if his letter of June 10, 1966, was insufficient notice under § 484.140 to create a lien in his favor, U.S.F.&G. and Shirkey by their conduct waived or are estopped to assert any defects therein. Both estoppel and waiver are affirmative defenses. Rule 55.08 V.A.M.R. Passer did not plead such defenses and they are not before us for consideration. Finally, Passer says that if the court holds that § 484.140 requires that a notice of lien thereunder state that the attorney has a contingent fee contract and the per cent or amount thereof, such interpretation should be held to be prospective only. While not clearly expressed, Passer apparently is saying that we should simply announce that the statute shall be so construed in the future but that it does not apply to his letter. We reject this request. In the first place the cases [2] which he cites do not support the suggestion made. They hold that the attorney's lien statute (now § 484.140) will not operate to create a lien where the contracts on which the liens are based were entered into before the date on which the act was passed. They are not authority for holding that when a statute is interpreted the statute as so interpreted operates prospectively from the date of the interpreting decision. Generally, a statute becomes effective when it has been adopted and approved by proper authority unless it provides otherwise. State v. Kirby, 163 S.W.2d 964 (Mo.1942). Section 484.140, as we interpret it, was applicable to Passer's effort to create a statutory attorney's lien. It follows that the trial court erred in overruling U.S.F.&G.'s motion for directed verdict on Count I and erred in directing a verdict for plaintiff. The judgment on Count I is reversed.